The initial results of the US Congressional midterm elections, which point to a strong performance by the Democrats, have created selling pressure on Elon Musk's companies. Musk's companies, Tesla and SpaceX, known for his proximity to the Republican Party, have come to the fore with losses in post-election trading.
In market transactions, valuations for both companies saw declines of up to 5 percent. Behind this movement, the expectation that regulatory pressure in the fields of technology and artificial intelligence could increase if the Democrats become more influential in Congress came to the fore.
One of the topics closely watched by investors was the potential merger plans that have been mentioned between Tesla and SpaceX. It is assessed that Democratic gains could increase political and regulatory scrutiny during such a process.
Vikram Rai from First New York stated that Congress cannot cancel a potential merger on its own, but that the increasing influence of the Democrats could slow down the process. In a previous assessment, Rai had warned that if the Democrats were to win a strong election victory, both companies could face significant news-flow risks.
For the markets, as much as the final picture of the election results, regulatory signals regarding artificial intelligence, space technologies, and the electric vehicle sector in the new term will also be monitored.
News Source: 12punto
