Musk reportedly pushes Tesla and SpaceX merger before Trump leaves office

what happened

Shares of Tesla (TSLA) and SpaceX (SPCX) fell in overnight trading after reports that Elon Musk wants to combine his companies before President Donald Trump leaves office. According to Bloomberg sources cited by Stocktwits, a merger announcement is targeted for the first half of 2027, with closing during Trump's presidency. The companies have a combined market value of about $3.7 trillion, but independent committees have not yet agreed on terms.

ARK Investment Management analyst Brett Winton said on X that a merger could benefit both shareholder groups. ARK's model shows Tesla holders about 1.6 times better off in 2031 than if the companies stayed separate, and SpaceX holders about 2 times better off. By 2036, the gain for Tesla holders is roughly fivefold, versus 1.3 times for SpaceX holders. Winton noted that a fair premium depends heavily on the investment horizon.

Musk said on SpaceX's earnings call that a deal is far from certain. He said the special committees have not reached agreement on terms, and that approval would require backing from 50% of the entire share count rather than a simple majority of votes cast.

why it matters

For markets, the valuation link matters: Nicolas Owens of Morningstar said SpaceX stock could be used as currency for a deal, and a fall in its price could complicate an agreement. On Stocktwits, retail sentiment was extremely bullish for TSLA and bullish for SPCX. TSLA is down 14% year-to-date, while SPCX has fallen 1%.

market impact

TSLA, SPCX: a possible merger reshapes the valuation of both companies and depends on SpaceX's share price.

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