Elon Musk's swift merger of SpaceX with xAI previously caught many by surprise. Now, analysts, investors, and close followers of Musk are actively debating what some consider the ultimate corporate combination: weighing the pros and cons of a merger between SpaceX and Tesla Motors.
As SpaceX moves closer to its initial public offering (IPO), some investors are already discussing the possibility of a subsequent "Musk-company" super-merger. Musk has previously stated that he views his companies as increasingly convergent, though he has not commented directly on merger speculation.
Despite this, certain Tesla supporters believe that merging the two firms could integrate Musk's various projects, potentially accelerating his ambitions in artificial intelligence (AI) and creating one of the most valuable companies in history.
Influential retail investor Alexandra Merz, known online as Tesla Boomer Mama, posted on Musk's platform X outlining her ideal scenario: a stock-swap merger in June or July, valuing both companies equally.
If such a deal were executed at current valuations, it would offer a modest premium to Tesla investors. According to FactSet, Tesla's stock has declined 22.5% since the start of the year.
While Merz cautioned that her prediction might be speculative, she described her hypothesis as "connecting the public dots."
Others, such as Texas-based IT executive James Robertson, remain more skeptical. Robertson, who purchased Tesla shares in 2014, expressed concern that a merged entity might follow the troubled path of other conglomerates like General Electric, potentially jeopardizing the success of both companies. Nonetheless, he remains eager to invest in SpaceX's IPO when possible, which could become the largest IPO ever.
He stated, "I think owning shares in both companies will be more valuable in the long run."
Musk has never shied away from discussing the integration of his companies to achieve his life goal of establishing a human civilization on Mars. Former Morgan Stanley analyst Adam Jonas humorously referred to such a merger as the "Muskonomy." In recent weeks, other Wall Street analysts have picked up on this theme, with some telling investors that a merger holds a certain logic.
Barclays analyst Dan Levy wrote in February, "A key question we receive from investors is whether Elon ultimately plans to merge Tesla and SpaceX into a broader 'Elon Inc.,' which has long been a hope of Tesla's ultra-bulls."
He added, "While a Tesla-SpaceX merger seems unlikely at present, we believe there is potential for a combination in the future."
SpaceX filed confidentially for an IPO last week, aiming to go public by July. Following its merger with xAI in February, SpaceX's most recent valuation stands at $1.25 trillion.
Meanwhile, Tesla is already publicly traded with a market capitalization of $1.1 trillion.
A merger between SpaceX and Tesla would rank as the largest M&A transaction in history.
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