Shares of Tesla, Inc. and Space Exploration Technologies Corp. (SpaceX) fell about 1.8% each in U.S. after-hours trading Tuesday, Bloomberg reported, as midterm results pointed toward Democratic control of Congress.
The Associated Press later called both the House and Senate for Democrats. It also projected Democratic Sen. Jon Ossoff’s reelection in Georgia over Rep. Mike Collins.
Bloomberg reported investor concern that a Democratic Congress could bring closer scrutiny of artificial intelligence and complicate a potential combination of the companies. Vikram Rai, a portfolio manager and macro trader at First New York, told Bloomberg before the vote that a Democratic sweep would bring “major headline risk” for both stocks. The timing of the declines does not establish that the election results caused them.
Tesla and SpaceX had previously disclosed a review of a possible combination. Tesla’s quarterly filing says its special committee is exploring closer ties with SpaceX, including a combination. SpaceX’s filing says its committee is evaluating a combination. SpaceX says its committee has made no decision, and neither company has announced a deal.
Tesla and SpaceX Chief Executive Elon Musk said on SpaceX’s Oct. 20 earnings webcast that cooperation on artificial intelligence was one reason to consider combining the companies. He cautioned that a merger was uncertain and would require committee and shareholder support. Neither filing sets a date for a committee decision.
