SpaceX and Tesla Boards Consider $3.5 Trillion Merger as Elon Musk Supports Proposal
Elon Musk has expressed strong support for a potential merger between SpaceX and Tesla Inc., which could create the largest corporate union in history. During a conference call following SpaceX’s earnings announcement, Musk revealed that both companies’ boards have established special committees of independent directors to explore the merger. SpaceX is currently valued at over $2 trillion, while Tesla’s market value stands at approximately $1.5 trillion.
Musk acknowledged the complexities involved in merging the two companies, particularly in securing support from Tesla shareholders. He described the situation as “tap dancing through a minefield” but emphasized the merits of combining their assets, which range from electric vehicles to AI data centers and rocket capabilities. Musk stated, “I think it would be a good idea, but it’s really up to the special committees of both companies,” noting that he cannot participate in discussions due to a conflict of interest.
Following Musk’s comments, shares of both SpaceX and Tesla saw gains in late trading. SpaceX stock rose by 10%, while Tesla’s shares increased by as much as 3.5%. A merger would create a conglomerate that spans electric vehicles, energy storage, rockets, and satellites, with a shared focus on leveraging artificial intelligence for various applications. Gene Munster, founder of Deepwater Asset Management, indicated that Musk is eager to move forward with the merger, stating, “There’s no question that Musk wants the merger, and he wants to get it done sooner rather than later.”
SpaceX reported a net income of $4.4 billion for the quarter ending in September, significantly surpassing analysts’ expectations of $1.88 billion. The company’s revenue surged by 161% year-over-year, driven in part by its AI business, which generated $7.56 billion in the quarter, more than nine times its revenue from the same period last year.
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