What changed
Tesla and SpaceX are examining a possible merger after Elon Musk said he believes combining the companies could be a good idea. Special committees at both companies are reviewing the proposal, but no terms have been agreed and shareholders would still need to approve it.
The figures involved are enormous: SpaceX was valued at roughly $2tn and Tesla at about $1.5tn. SpaceX shares rose 8% after the announcement, while Tesla shares rose 2%.
Why it matters
This would join an electric-car company increasingly focused on robotics with a space company whose businesses now include rockets, Starlink satellites and cloud computing. Musk said the companies could gain from working together on chips, artificial intelligence and software, building on their joint Terafab effort.
The financial picture is less tidy. SpaceX reported $7.5bn from cloud computing and $5.2bn from Starlink, but still lost $1.1bn so far this year. A merger would therefore combine fast-growing assets with a company that is not yet profitable, while placing two vast corporate empires under one roof.
Musk is not serving on either committee because he is chief executive of both companies and considers himself conflicted. Tesla shareholders would face a particularly high bar: at least 50% would have to approve the deal. Whether a merger happens, and on what terms, remains uncertain.
Comments
No comments yet.