Wall Street is again betting on a merger between Tesla and SpaceX after the rocket maker's record listing, though analysts caution the combined company would still lose money.
Key Points:
- SpaceX completed the largest IPO on record, and its shares have climbed sharply since the Jun. 12 debut.
- Renewed talk points to a possible Tesla merger that would form a company worth about $3.4 trillion.
- Analysts warn the merged business would post negative annual earnings based on recent results.
SpaceX IPO Revives Merger Talk
SpaceX priced its stock at $135 and began trading on the Nasdaq under the ticker SPCX on Jun. 12. The sale raised about $75 billion, later swelling to $85.7 billion, and valued the firm near $1.77 trillion.
No listing has ever been bigger.
A tie-up may not be far off. SpaceX president Gwynne Shotwell hinted that a combination sits in the company's future, a deal she said could ease life for Elon Musk, who already runs both firms and would steer the merged board.
The two companies already work closely. They share a planned $55 billion chip plant, called Terafab, plus a string of supply deals. Tesla shares last closed near $406, leaving the carmaker worth about $1.65 trillion, a value that nearly matches SpaceX despite thinner profits.
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Why The $3.4 Trillion Math Matters
Wedbush analyst Dan Ives pegged the odds of a deal near 80%, calling the union a holy grail for Musk's push into AI. A combination would value the pair around $3.4 trillion and rank it fifth among the world's biggest listed firms.
The trouble is profit. Researchers who estimated the merged numbers put combined yearly earnings near minus $1 billion, after SpaceX burned about $14 billion in free cash flow last year and warned of more outlays ahead. Tesla, whose own earnings have slid toward $3.9 billion from $15 billion in 2023, leans on fading regulatory credits and on Bitcoin (BTC) holdings that swing its profit each quarter.
A deal would also dilute SpaceX backers, cutting their stake to about 52% even without a premium. They would then shoulder Tesla's heavy spending on robots, self-driving cars and data centers.
Musk has long folded his ventures together. He merged X with xAI, then sold both to SpaceX, after buying SolarCity with Tesla stock in a $2.6 billion deal in 2016. Skeptics at Oppenheimer countered that the two firms may serve him better apart, leaving his grandest deal unbuilt.
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