Musk loses $113bn in two days as post-midterm selloff hits Tesla and SpaceX

The combined market capitalisation of Tesla and SpaceX fell from about $3.5 trillion on Tuesday night to $3.04 trillion on Thursday night, erasing roughly $456 billion in total value. As of Thursday night, SpaceX’s market cap was about 87% of its value on midterms night and Tesla’s about 86%, Fortune reported.

The selloff came amid investor concerns that Democrats want to investigate Musk’s involvement with DOGE and potential conflicts of interest arising from SpaceX’s billions in federal contracts. Incoming House Oversight Committee chair Rep. Robert Garcia has pledged to investigate “corporate corruption”, with his spokesperson telling Politico that Musk’s DOGE role “is something we plan to investigate.” Senator Richard Blumenthal has also written to Musk about SpaceX’s Starlink contracts and its ability to restrict service.

Senior equity analyst Keith Snyder of CFRA Research called the selloff a “knee-jerk reaction”, noting that President Donald Trump, who remains friendly toward Musk, holds veto power over any major AI restrictions Democrats might pass. “There’s too many pieces that are already in place for Musk, for Tesla, for SpaceX that will allow him to continue without having to worry about any kind of Democratic action,” Snyder said. He pointed out that the Federal Communications Commission retains a Republican majority, making major regulatory action unlikely, though Democrats could “dramatically slow things down.”

Other analysts are more cautious. Dan Ives wrote in a note that a potential Tesla-SpaceX merger “faces a much tougher regulatory roadmap” because Texas turned blue in the election. The political shift coincides with long-running investor unease about the sustainability of the AI buildout. Musk has said SpaceX can bring 10 gigawatts of compute online by 2027, a scale one research firm said equals all of Google’s data-centre capacity from 1999 to 2026. Snyder said even achieving 25% to 50% of that goal would be “incredible”, but saw greater risk emerging if a Democrat wins the White House in 2028.

For now, Snyder said, a Republican president and a Democrat-controlled Congress will produce a stalemate, and “the fears to these AI companies are real now.” Democrats’ “agenda has clearly stated they want to rein in AI.” The longer-term outlook, he said, depends on what happens in 2029.