Experts urge caution over a possible Tesla and SpaceX merger
Dow Jones Newswires: most mergers destroy value, and a Tesla and SpaceX deal would face serious hurdles and legal risks for shareholders.
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what happened
According to Dow Jones Newswires, citing a column by Mark Hulbert, researchers Feng Gu and Baruch Lev studied about 40,000 M&A deals from 1980 to 2022. They estimate that 70% to 75% of those deals failed, meaning the merged company had a lower market cap three years later than the separate companies would otherwise have been worth.
Gu believes a Tesla (TSLA) and SpaceX (SPCX) merger would not escape these odds. Very large deals tend to fail more often, and the synergies promoters cite look unclear so far. Gu also flags regulatory risk from Tesla's operations abroad, including in China. These comments came as Elon Musk said special committees at both companies had been formed to explore a merger.
why it matters
For markets, the point is that investors currently value the two companies' growth differently: SpaceX reported faster-than-expected growth this week, while Tesla reported flat revenue. If a deal went ahead, the slower growth of Tesla's car business could weigh on the combined company's overall growth rate.
market impact
Tesla and SpaceX shares: uncertainty over a possible merger may affect how investors value both companies
tags
instruments
sources
- Why investors should be skeptical of a potential Tesla-SpaceX merger — Dow Jones Newswires, 21 October 2026 at 21:44 UTC
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