Tesla and SpaceX share prices fell in the US following the Democratic victory
During the election campaign, Musk became the largest donor to the Republicans. In total, he spent at least $446 million to support the party.
Tesla and SpaceX shares drop after Democrats win in US
Shares of Elon Musk's Tesla and SpaceX companies fell after the Democrats won by a large margin in the US Congressional elections.
During the election campaign, Musk became the largest donor to the Republicans. He spent a total of at least $446 million to support the party.
According to Kathleen Brooks, research director at trading platform XTB, a Democratic victory could complicate Musk's plan to merge Tesla and SpaceX. Musk announced this plan in October.
“While Congress cannot stop the merger of SpaceX and Tesla, it could slow down the process through additional scrutiny. As a result, political risks have increased for both companies. This, in turn, could negatively affect their share prices,” Brooks said.
Another factor worrying investors is that Elon Musk has located the main part of his business in the state of Texas. He actively supported Republicans in this particular state.
However, according to preliminary results, Texas residents, who usually vote for Republicans, chose Democrats this time. Prior to this, the last time Democrats won a gubernatorial election in Texas was in 1990, and a Senate election in 1988.
On November 3, midterm Congressional elections were held in the US. Democrats defeated Republicans by winning majorities in the House of Representatives and the Senate. According to the Associated Press, Democrats won at least 228 seats in the House of Representatives. They also gained at least seven Senate seats previously held by Republicans. Vote counting is ongoing.
US President Donald Trump admitted that the war with Iran was also a reason for the Republicans' defeat in the Congressional elections. However, he does not consider the Republicans' defeat to be his own political failure.