Two trillion-dollar giants, one CEO, and now a very big question. Elon Musk says he is actively considering merging Tesla and SpaceX, the BBC reported. “Do I think it would be a good idea? Yes,” he said on Tuesday’s call about SpaceX’s quarterly results.
Musk said both companies have formed special committees of independent directors to study the idea. “The special committees have not reached agreement on terms of any transaction and there’s no guarantee that they will,” he said. “But I do think there is a lot of merit to merging and a lot to be gained.” He also warned, per NBC News, that “some people out there assume that a SpaceX and Tesla merger is a certainty, and I think that would be overstating it.”
The size is BONKERS. The BBC puts Tesla at roughly $1.5 trillion and SpaceX at $2 trillion, which would make it one of the largest mergers in history. Musk calls himself a “conflicted party,” says he isn’t on either committee, and compared even talking about it to “tap dancing through a minefield.”
The hurdle: at least 50% of Tesla’s shareholders would need to approve, which Musk called “quite a high hurdle to achieve.” His pitch is chips, AI and software, plus Terafab, the chipmaking effort the two companies already share.
Wall Street liked the sound of it. SpaceX shares rose 8% after hours and Tesla gained 2%, per the BBC. SpaceX posted a $4.4 billion profit for the latest quarter, though it lost $1.1 billion over the first nine months of the year. Tesla reports its own results Wednesday. Grab the popcorn.
Featured image: editorial illustration by Bugle Blast.
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