Musk Doesn't Say 'No' to Tesla-SpaceX Merger Rumors

When asked a pointed question about the possibility of a merger between Tesla and SpaceX, Elon Musk praised it as a 'good question' and did not deny it. He mentioned deep collaboration and overlapping management between the two companies, leaving room for speculation by saying, 'You can imagine who would take what actions, can't you?'

Merger rumors have recurred periodically for several years, with Dan Ives predicting an 80-90% probability of a merger by early 2027. The prediction market Kalshi also rated the probability of a merger before 2028 as high.

In the past, Elon Musk immediately denied fake news such as rumors of spinning off his Chinese business, drawing a clear line. This shows his tendency to be firm when he needs to say no.

However, regarding the merger question, he never used the word 'no.' He neither avoided nor directly denied the related questions, instead framing his answer by emphasizing the deep collaboration between the two companies.

Tesla and SpaceX are currently facing surging demand for server chips, humanoid robots, and automotive chips. Concerns about the supply chain have been raised, including the possibility of a halt in chip supply from Taiwan, while semiconductor fabs worldwide are operating at maximum capacity.

In response, the two companies are constructing a joint research and development workshop at the Austin site to secure 'Tera'-level semiconductor production capabilities. This strategy aims to reduce dependence on semiconductor supply and accelerate innovation through in-house chip production.

Equipment orders have already been placed, and concrete results are expected by the end of next year. Musk emphasized the urgency of in-house production, stating, 'We either make Tera or we fail; there's no other answer.'

From the moment the two companies jointly selected a site, ordered equipment, and began construction, they entered a phase of physical collaboration from which there is no turning back. Sharing a factory has a different meaning than a simple merger announcement on paper.

Unlike cases where integration must be monitored even after a merger is announced, this signifies that a substantive, irreversible integration process has already begun.

The public unveiling is reportedly near SpaceX's McGregor test site.

This is interpreted as an intention to dispel fake controversy through an actual demonstration rather than an AI-generated video. The event is expected to allow real people to witness the actual 'Roadga.'

This process is likely to proceed in the order of personnel movement, asset integration, and then name consolidation.

Currently, Tesla's stake in SpaceX is about 1%, and the investment in XAI is expected to be converted into SpaceX's acquisition of XAI.

JPMorgan evaluated the merger of Tesla and SpaceX as a reasonable combination on paper but cited Chinese regulatory approval as the biggest practical hurdle. They consider this issue so critical that they described Tesla's high dependence on its Chinese factory as 'hostage.'

In contrast, ARK Invest expressed an opposing view, stating that the China issue is merely a small wrinkle at the negotiating table and would not significantly impact the merger.

While it was difficult to assess the company's value when it was private, SpaceX now has a determined price.

This allows for an accurate calculation of company value if a merger actually begins, and establishes a basis for using public shares as a means of merger payment.

Elon Musk's avoidance of a direct answer to the merger question in an interview and his failure to explicitly deny it can be seen as not entirely ruling out the possibility of a merger. If he had considered the two companies separately, simply saying 'no' would have been sufficient.

With the delay in the Tesla shareholder meeting schedule coinciding with merger rumors, shareholders appear to be interpreting Musk's ambiguous responses as a signal suggesting a potential merger.

X (formerly Twitter) poll results showed that the preference for $550 (50% premium) received the highest votes.

This translates to a 54% premium over the closing price of $356 and reflects the expectation that Tesla shareholders' equity stake would increase from the current 42% to 52% upon merger.

At the time, it led to a lawsuit for $13 billion in damages, but Elon Musk ultimately won in the Delaware Supreme Court in 2023.

This suggests that a merger could be achieved even without offering the premium shareholders desire. The formation of an independent special committee in the future will likely be a key factor in the merger terms.

The two companies are strengthening cooperation in various ways, including joint construction of semiconductor factories and collaboration on next-generation vehicle development. The earnings announcement scheduled for October 21 is expected to be a significant turning point in these merger discussions.