Wall St says Tesla-SpaceX deal inevitable but Musk says it's not certain
TSLA•Analysts expect a Tesla-SpaceX deal by the end of next year, but Elon Musk said the companies' special committees have not agreed on terms and a merger is not certain. Tesla needs a majority of all shares for approval, Musk said.
1. Merger remains uncertain
Musk said there is “a lot of merit” in combining Tesla and SpaceX, but two special committees must agree on terms and Tesla shareholders must approve a deal. He said Tesla needs a majority of all shares, not just votes cast, meaning uncast ballots count against approval. Analysts say the committees have not discussed terms, though Wall Street expects a deal by the end of next year.
2. Control and vote concerns
Musk holds about 85% of SpaceX’s voting power and roughly 20% of Tesla. Analysts estimate a merger could give him about 57% to 58% of voting rights, based on illustrative exchange ratios; no ratio has been negotiated. Analysts have flagged low voter turnout and broker non-votes as potential obstacles, while governance and regulatory questions could also arise.
3. Business case and spending
Tesla and SpaceX are jointly developing the Terafab chip plant, and AI makes up more than half of SpaceX’s revenue. SpaceX may spend another $35 billion to $40 billion in the fourth quarter to fund expansion. Tesla shares rose 1.5% and SpaceX shares 8.4% in premarket trading. Tesla was set to report third-quarter results after markets closed.
