Musk Says Tesla and SpaceX Boards Weigh a Merger

AUSTIN, Tex., Oct. 20 — ElonElon Musk said on Tuesday that Tesla and SpaceX have each formed a special committee of independent directors to discuss combining the two companies, “at the request of shareholders.” Asked about a merger by a Deutsche Bank analyst on SpaceX’s quarterly call, he said he felt like he was “tap dancing through a mine field,” according to a transcript published by The Motley Fool.

Because he is “a conflicted party,” he said, he cannot take part in the committees’ discussions. “I think some people out there assume that a SpaceX and Tesla merger is a certainty,” he said. “And I think that would be overstating it.” He called a merger a “good idea,” but said “it’s really up to the special committees of both companies.”

The committees “have not reached agreement on the terms of any transaction,” Mr. Musk said, and on the Tesla side a deal would need the votes of half of all shares, “not just those who vote,” which he called “quite a high hurdle.” He did not say when the committees were formed or who sits on them, and the latest filings each company had made with the Securities and Exchange Commission by early Wednesday, a SpaceX 8-K with its results and a Tesla proxy supplement, did not mention them.

At stake is who would control the result. CNBC said a combination would be the largest merger in history. In an all-stock deal, Barclays estimates, Mr. Musk would hold about 37 percent of the equity and 56 percent of the votes, Reuters reported on Monday. The bank suggested last week that a deal could be announced before Tesla’s annual meeting, with SpaceX the likelier acquirer.

The two boards already overlap. Ira Ehrenpreis, who chairs Tesla’s compensation committee, has served on SpaceX’s board since February, Tesla’s proxy says.Ira EhrenpreisA venture capitalist since 1996, he is a founder of DBL Partners, an impact-investing firm formed in 2015. Tesla counts him as an independent director under Nasdaq rules. Tesla already owns SpaceX stock: on March 12 it completed a purchase of about $2 billion of SpaceX Class A shares, an investment it had agreed in January to make in xAI before SpaceX absorbed that company.

In July, asked on Tesla’s own call by a Wells Fargo analyst whether the companies might merge, Mr. Musk said “we can’t talk about combining companies and that kind of thing on an earnings call,” as quoted by Drive Tesla Canada. Merger speculation has since gathered momentum, Reuters wrote on Monday. “Increasingly the strength and diversification of SpaceX makes a merger with Tesla feel imminent,” Daniel Newman, chief executive of the Futurum Group, a technology research firm, said in remarks quoted by Reuters on Tuesday.

After the Close

Tesla and Meta both report third-quarter results after the market closes on Wednesday. Tesla takes questions on a webcast at 5:30 p.m. Eastern. It delivered 486,532 vehicles in the quarter. Analysts expect revenue of $27.9 billion, a slight dip from a year earlier, according to LSEG data cited by CNBC.

Tesla’s answers to a special order from the National Highway Traffic Safety Administration are due Oct. 30, in an audit of how Tesla certified that the Cybercab, which has no steering wheel or pedals, meets federal safety standards.The AuditNHTSA opened Audit Query 26002 on Sept. 3. Tesla asked for eight more weeks to answer, citing “the voluminous nature of the request”; the agency granted 30 days. Tesla’s shares closed Tuesday at $373.71, up 1.5 percent; they were down about 17 percent this year as of Tuesday, CNBC noted.

Meta, which hosts its call at 4:30 p.m. Eastern, forecast in July third-quarter revenue of $61 billion to $64 billion, and 2026 capital expenditures, including principal payments on finance leases, of $130 billion to $145 billion. Zacks estimates call for revenue of $63.24 billion, up more than 23 percent from a year earlier. Zacks wrote that management’s commentary on 2027 capital spending, among other things, could play a significant role in how the stock moves after the report. Meta’s shares closed Tuesday at $694.25, down 1.6 percent, their fifth straight decline.METANasdaq614.99▼9.53−1.5%Meta Platforms · Friday’s session They have lost about 9 percent since their close on Oct. 13.

Texas Instruments holds its third-quarter call at 3:30 p.m. Central on Wednesday, and Lam Research, a maker of wafer-fabrication equipment, holds its call at 5 p.m. Eastern.

Tesla’s proxy, filed on Monday for its Dec. 3 annual meeting, holds three proposals and no merger vote. Whatever the committees agree, Mr. Musk said, “that’s got to be put to the shareholders as a vote.”