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There has been a lot of talk in recent days, weeks and months about the possibility of SpaceX and Tesla merging. Elon Musk has been a fan of merging, swallowing and uniting his companies. This has happened especially because Musk’s companies have needed savings. Tesla saved SolarCity, a company founded and run by Musk’s cousins and of which Musk was president. xAI and X (formerly Twitter) were saved by SpaceX. Now there are murmurs and expectations that Musk’s two biggest companies, SpaceX and Tesla, will merge or one will swallow the other.
This has been a hot topic of conversation in the investment world since SpaceX went public, but the conversations have gotten louder recently.
“A merger between Elon Musk’s Tesla Inc. and SpaceX could be announced before the electric vehicle maker’s annual general meeting, according to Barclays analysts.” Bloomberg reported last week. Gary Black of The Future Fund, a well-known Tesla investor [TSLA] who, however, has never been shy about criticizing Musk’s decisions or identifying potential risks and problems at the company, had this to say about last week’s not-so-impressive Roadster event:
“I agree with those who say the sole purpose of last night’s Roadster event was to advocate for a $SPCX-$TSLA merger. My guess: Announcement in the coming weeks $SPCX buys $TSLA for $420/share in SPCX stock; deal could take a year to close.”
Walter Isaacson, who was given the opportunity to follow Musk and write his biography, also saw the second-generation Roadster as “almost a joint product” between SpaceX and Tesla, especially including “the way the boosters and rockets work.”
“I think it shows why eventually, and I assume, Tesla and SpaceX will merge,” he added.
But what is the reason for the merger of the two companies? Is one expected to find itself in financial difficulties in the coming months, spurring the need for a bailout or merger? Not quite. Is there any other compelling reason to merge the two companies?
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