In the U.S. midterm elections held on November 3, the anticipated "blue wave" indicating a Democratic victory materialized, leading to declines in Tesla and SpaceX stocks during after-hours trading. Investors are closely monitoring the potential impact of a Democratic congressional majority on the companies, particularly given that their CEO, Elon Musk, is a key supporter of President Donald Trump.
According to Bloomberg, as early election results indicated a favorable outlook for Democratic Senator Jon Ossoff in Georgia, shares of Tesla and SpaceX fell by approximately 1.8% in after-hours trading. Local media, including NBC, projected that the Democrats would reclaim majorities in both the House and Senate by around 11:30 PM Eastern Time (1:30 PM Korean Time) on election night.
Bloomberg noted that concerns are growing over potential increased regulation of artificial intelligence (AI) with a Democratic majority, which could also introduce uncertainties regarding the merger efforts between electric vehicle manufacturer Tesla and aerospace company SpaceX.
Tesla's stock has risen 34% since late July, fueled by investor optimism surrounding AI-related products and the potential merger with SpaceX. Earlier this year, SpaceX's market capitalization reached approximately $1.9 trillion, positioning it among the world's most valuable companies following its initial public offering (IPO).
Vikram Rai, an analyst at First New York, told Bloomberg that while Congress cannot unilaterally block the merger, a Democratic majority could delay the process. He stated, "If the Democrats gain control of both chambers, both companies' stocks could be exposed to significant risks."
CEO Musk is reportedly accelerating merger discussions in light of these political variables. Bloomberg cited sources indicating that there are plans to announce the merger agreement between Tesla and SpaceX by the first half of next year, aiming to finalize the deal while Trump is still in office.
Musk has maintained a close relationship with Trump, having served as a White House advisor early last year and currently co-leading new initiatives at the Department of Defense. Given Musk's ties to Trump, the stock prices of his companies have been sensitive to the political climate. For instance, Tesla's stock surged over 90% within a month after Trump was re-elected in the 2024 presidential election.
In the lead-up to the midterm elections, Musk contributed approximately $450 million to Republican political fundraising efforts and urged his 240 million followers on X (formerly Twitter) not to vote for Democratic candidates.
* This article has been translated by AI.
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