SpaceX shares fell 2.59% on Wednesday amid speculation about a possible merger with Tesla. However, the decline appeared to reflect broader weakness in artificial intelligence stocks rather than concerns about the rumoured deal.
Barclays analysts led by Dan Levy believe the two companies, both led by Elon Musk, could merge before Tesla’s next annual general meeting, which is scheduled to take place no later than December 6. That timing could allow shareholders to vote on the proposed deal at the same meeting.
Merger Could Combine Physical and Virtual AI
Levy’s team views a potential merger as a form of vertical integration. The deal could bring together Tesla’s physical AI technologies, including its Robotaxi service and Optimus humanoid robots, with SpaceX’s AI-related products and projects, including Grok and Macrohard.
Although the merger could deliver some financial synergies, the analysts believe its central objective would be to combine the companies’ artificial intelligence technologies.
The proposed merger would also raise questions about ownership and voting control.
Assuming SpaceX merges with Tesla, Musk could own approximately 37% of the combined company while controlling 56% of its voting rights, according to Levy’s analysis. This outcome would depend on the companies’ share structures and the final terms of the transaction.
Levy estimates that each Tesla share could be exchanged for approximately 0.7 SpaceX shares, with a premium incorporated into the exchange ratio.
Musk’s Comments Fuel Speculation
Musk has previously made comments that have added to speculation about closer ties between the companies.
During Tesla’s second-quarter earnings call, he was asked whether a merger was possible. He pointed to increasing cooperation between the businesses, particularly through Terafab, describing it as a potentially significant product.
Musk also addressed the companies’ collaboration at last month’s All-In Summit.
“With all this collaboration, on so many levels, who can imagine what action one might take when there’s so much close collaboration in so many areas,” he said.
Neither set of comments confirms that a merger has been agreed or will take place.
Tesla and SpaceX Valuations
Tesla shares fell more than 1% in pre-market trading on Thursday. SpaceX was valued at approximately $2.06 trillion, while Tesla began the day with a market capitalisation of around $1.45 trillion.
Tesla is scheduled to report its third-quarter earnings on October 21.
For now, the potential merger remains speculative. Any transaction would depend on the companies’ decisions, its final terms and the required approvals.
