Musk Calls Tesla-SpaceX Merger ‘A Good Idea’ as Special Committees Form
Both companies have formed committees of independent directors to explore a combination, Musk said on SpaceX’s earnings call. He is barred from the talks — and no deal is agreed.
Elon Musk said Tuesday that Tesla and SpaceX have each formed special committees to explore a possible merger of the two companies. He called the idea a good one — and then cautioned that no deal is close.
The committees consist of independent directors from each company, Musk said on SpaceX’s third-quarter earnings call. They were formed at the request of shareholders. “Do I think it would be a good idea? Yes,” he said.
“I do think there’s a lot of merit to combining the companies,” Musk said. “We are pretty much in the superintelligence singularity, and there’s a lot to be gained from co-operating on developing superintelligence software.” He pointed to chip design, the Terafab AI-chip plant in Texas, robotics and Starlink connectivity as areas where the companies could work together.
Musk said he cannot take part in the discussions. He runs both companies. “Because I’m a conflicted party, I can’t actually be in the discussions of the special committees,” he said. “So it’s an odd kabuki dance where two groups of people are talking and I can’t be in the conversation.”
He warned against treating a merger as a done deal. The committees have not agreed on terms for any transaction, and Musk said there is no guarantee they will. On the Tesla side, a deal would need approval from 50 percent of all outstanding shares, not just shares voted — which Musk called “quite a high hurdle.”
The comments came on SpaceX’s third-quarter earnings call. The company reported a 161 percent rise in revenue to $14.6 billion, with net income of $4.4 billion. SpaceX listed on the Nasdaq in mid-June in the largest initial public offering in history; the shares have steadied at around $150 after briefly topping $200.
The remarks mark a shift from July, when Musk dismissed talk of a combination. Speculation has built in recent weeks, partly from activity between Tesla and SpaceX executives on X. Barclays analysts suggested this month that a deal could be announced before Tesla’s annual shareholder meeting on Dec. 3. Most Wall Street analysts believe SpaceX would acquire Tesla, not the reverse, since SpaceX has held the higher valuation since its IPO.
Investors responded quickly. SpaceX shares rose about 5 percent in after-hours trading, and Tesla gained about 1.1 percent, according to Barron’s.
