Tech & AI
SpaceX and Tesla form special committees to weigh a merger, Musk says
Elon Musk told SpaceX's earnings call that independent directors at both companies are exploring a deal, but said no terms have been agreed.
HedgeWeekly Tech & AI Desk ·
SpaceX and Tesla have each set up special committees of independent directors to consider a possible merger, Elon Musk, chief executive of both companies, said on SpaceX's third-quarter earnings call on Tuesday. Musk said the committees were formed at shareholders' request and have not agreed terms for any transaction.
Musk said he was a conflicted party and could not take part in the talks, but that he thought a combination would be a good idea. He pointed to growing cooperation between the two companies on AI software, robotics and connectivity, and to Terafab, their joint chip-manufacturing project. He warned that a deal was not certain and that treating it as one would be overstating the odds.
Approval is a higher bar at Tesla than at SpaceX. Musk holds more than 50% of SpaceX's voting power after its IPO, while a deal at Tesla would need backing from 50% of all shareholders, not only those who vote, according to TechCrunch. Axios put SpaceX's market value above $2 trillion and Tesla's at nearly $1.5 trillion.
Why it matters: a combination would create one of the world's largest listed companies and merge two businesses that are both increasingly valued on AI, chips and robotics. For Tesla holders, key questions include the exchange ratio, governance and how the independent committees handle Musk's conflicts. Tesla reports quarterly results on Wednesday, October 21, when investors may press for more detail.