Elon Musk's Tesla and SpaceX lose over $420 billion in combined market cap after midterms

Tesla and SpaceX shares declined by about 9% and 11% respectively on Thursday afternoon with investors concerned that Elon Musk, who is CEO of both companies, could face new Congressional probes, and his companies could face stricter regulation following U.S. mid-term elections.

The declines, which correlated with a broader tech selloff , brought aggregate market cap losses for SpaceX and Tesla to over $420 billion since Tuesday's close.

Musk's wealth, which had topped $1 trillion after SpaceX's IPO in June, is now down below $800 billion, having dropped about $90 billion in the past week, according to Forbes . He is still the richest man in the world.

Musk was the biggest donor to GOP candidates and causes in the mid-terms, with his financial contributions exceeding $470 million , the FT first reported.

Despite his bolstering the GOP war chest, most of the candidates Musk backed lost their races .

Dems won control of both the House and Senate. And in Texas, where both Tesla and SpaceX are headquartered, Democrats James Talarico (Sen. elect) and Gina Hinojosa (Gov. elect) beat long-time Musk allies, Ken Paxton and Greg Abbott.

Deutsche Bank analysts wrote in a note out on Wednesday, "While policy is naturally hard to predict, we could envision SpaceX facing some incremental headwinds in this type of backdrop."

Texas' Gov. elect Hinojosa "made data centers a major campaign issue," the analysts noted, calling for "a moratorium on new approvals until the legislature passes stronger protections on water use, electricity costs, local control, and incentives," and criticizing tax breaks for large facilities.

Tesla and SpaceX are both building out AI infrastructure in Texas, and are planning to build Terafab, a massive facility, which will include a data center and sprawling semiconductor factory, in Grimes County, Texas.

SpaceX also plans to build out a "supercomputer" at its Starbase, Texas launch facility and company town, according to company job listings .

Deutsche Bank analysts also wrote that SpaceX's Texas compute capacity could now be at risk of delays. Capital expenditures by the company may need to increase to meet the requirements of tighter, anticipated regulations around data center build out, the analysts wrote.

Musk and SpaceX have been instructed to preserve records concerning restrictions they imposed on a military version of their Starlink satellite internet service in Ukraine, CNN first reported , citing an aide to a Democratic Senator. The restrictions hampered the country's ability to defend against attacks by Russia.