Elon Musk Considers Merging Tesla, xAI, and SpaceX
Recent reports suggest that Elon Musk is contemplating a merger involving SpaceX with either Tesla or xAI. This potential move is generating significant concern among Tesla shareholders amid anticipation of a public offering for SpaceX.
Potential Mergers Under Consideration
According to Bloomberg, SpaceX is evaluating two possible merger paths as it plans for an initial public offering (IPO) expected by mid-2026:
- Merger with Tesla
- Merger with xAI, which already owns X (formerly Twitter)
Some investors advocate for a combination of SpaceX and Tesla. Concurrently, SpaceX and xAI are discussing a collaboration that could involve xAI shares being swapped for SpaceX stock ahead of the IPO.
Valuation and Conflicts of Interest
Musk’s ownership stakes differ markedly across his companies. He holds a significantly larger percentage of SpaceX and xAI compared to Tesla. This raises potential conflicts as Musk would essentially negotiate a merger against himself.
For Tesla’s public shareholders, this situation is particularly concerning. Any merger would require Musk to assign a fair value to:
- A publicly traded automaker facing declining deliveries and revenues
- A private rocket company secured by government contracts
- A cash-intensive AI firm racing to compete with established players like OpenAI and Google
Concerns for Tesla Shareholders
The ongoing corporate dynamics pose risks for Tesla investors. Musk previously influenced Tesla’s board to invest $2 billion in xAI, leading to legal challenges from shareholders. If a merger occurs, the valuation process could disproportionately favor Musk’s private interests.
Investor concerns are underscored by Musk’s track record. For instance, significant amounts invested in xAI and Twitter resulted in marked losses for public investors while bolstering private company valuations.
Future Implications
As SpaceX navigates its potential absorption of either xAI or Tesla, shareholders must remain vigilant. The prospect of self-dealing practices could result in unfavorable outcomes for those invested in Tesla.
Tesla’s board has so far shown little resistance against Musk’s decisions, which raises alarms about the potential for conflict resolution. If these mergers unfold, they may pose a serious risk to Tesla shareholders, who may end up with less favorable merger terms.
In summary, as discussions advance, Tesla shareholders should closely monitor the implications of these possible mergers for their investments.
