The sell-off was savage. Tesla Inc. sank 11% on Thursday while SpaceX dropped 9%, wiping away a staggering $456 billion in combined equity value since Tuesday's close. Institutional desks offloaded Musk-linked holdings in heavy volume as the outcome of the US midterm elections became clear: Democrats seized control of both the House of Representatives and the Senate. The political upset dealt an immediate blow to Elon Musk, who poured more than $470 million into Republican war chests only to see most of his chosen candidates lose their races.
Musk felt the fallout directly in his personal balance sheet. His net worth contracted by approximately $90 billion over the past week, tumbling below $800 billion after crossing the $1 trillion milestone following SpaceX's initial public offering in June. He remains the world's richest individual, but his policy leverage in Washington evaporated overnight. Traders moved quickly to price in aggressive congressional investigations, stricter technology oversight, and an abrupt end to favorable state-level treatment.
| Metric | Peak / Baseline | Current Post-Midterms Level | Net Change |
|---|---|---|---|
| Tesla Share Price (Thursday) | — | — | -11% |
| SpaceX Share Price (Thursday) | — | — | -9% |
| Combined Market Capitalisation Shed | — | — | -$456 Billion |
| Elon Musk Net Worth | >$1.00 Trillion | <$800 Billion | -$90 Billion |
| Midterm Political Contributions | — | >$470 Million | Direct Loss |
The shock was sharpest in Texas, the operational center for Musk's manufacturing and aerospace operations. Democratic Senator-elect James Talarico and Governor-elect Gina Hinojosa ousted two entrenched Musk allies—Attorney General Ken Paxton and Governor Greg Abbott. That dual defeat upends local permitting and subsidies for "Terafab," a colossal data center and semiconductor plant planned for Grimes County. It also casts an shadow over SpaceX's high-performance AI supercomputer facility at Starbase in Boca Chica.
Cost projections are already shifting. Deutsche Bank analysts warned institutional accounts that SpaceX's computing rollout across Texas will face bureaucratic delays, forcing the aerospace company to hike capital spending to meet stringent emissions and energy regulations on mega data centers. Cash that was earmarked for rapid factory scaling must now cover administrative compliance and revised environmental filings.
Legal pressure is mounting just as fast on Capitol Hill. A Senate directive has ordered Musk and SpaceX management to preserve all communications and operational records detailing restrictions placed on Starlink’s military systems in Ukraine, where network curbs hamstrung defensive frontline counter-offensives. These looming congressional subpoenas present a direct obstacle to Musk's broader corporate roadmap, clouding his proposed merger between Tesla and SpaceX well before the transaction can ever reach a shareholder vote.