Shares in American billionaire Elon Musk’s firms, Tesla and SpaceX, fell after news broke that the Democratic Party had achieved a major win in the Congressional elections. As reported by The Wall Street Journal, Tesla’s stock decreased by 3.5% in after-hours trading, whereas SpaceX’s shares declined by 3.6%.
Throughout the election campaign, Mr. Musk became the top donor to the Republican Party, giving a total of at least $445 million. Kathleen Brooks, research director at the trading platform XTB, observed that a Democratic win could impede a possible merger between Tesla and SpaceX.
“Although Congress cannot prevent a merger between SpaceX and Tesla, it could delay the process through increased examination.” As a result, Brooks noted that Tesla and SpaceX are now encountering increased political risks, potentially leading to a decline in their stock prices.
Investors might be especially worried that Elon Musk has based his business empire in Texas—a state where he has notably engaged in backing local Republicans. Nevertheless, initial findings suggest that voters in the state, historically inclined towards Republicans, chose Democrats in this election, both for the governor position (a change not observed since 1991) and in the Senate contest (a change not recorded since 1988).
NBC News projections indicate that the Democratic Party is expected to secure 255 out of 435 seats in the House of Representatives and a minimum of 51 out of 100 seats in the Senate, a number that may increase to 56 after the final tally is completed.
source: wsj.com, nbcnews.com
