Tesla SpaceX Merger Talk: $3.4T Giant That Would Still Lose Money

Wall Street is again betting on a merger between Tesla and SpaceX after the rocket maker's record listing, though analysts caution the combined company would still lose money.

SpaceX IPO Revives Merger Talk

SpaceX priced its stock at $135 and began trading on the Nasdaq under the ticker SPCX on Jun. 12. The sale raised about $75 billion, later swelling to $85.7 billion, and valued the firm near $1.77 trillion.

No listing has ever been bigger.

A tie-up may not be far off. SpaceX president Gwynne Shotwell hinted that a combination sits in the company's future, a deal she said could ease life for Elon Musk, who already runs both firms and would steer the merged board.

The two companies already work closely. They share a planned $55 billion chip plant, called Terafab, plus a string of supply deals. Tesla shares last closed near $406, leaving the carmaker worth about $1.65 trillion, a value that nearly matches SpaceX despite thinner profits.

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Why The $3.4 Trillion Math Matters

Wedbush analyst Dan Ives pegged the odds of a deal near 80%, calling the union a holy grail for Musk's push into AI. A combination would value the pair around $3.4 trillion and rank it fifth among the world's biggest listed firms.

The trouble is profit. Researchers who estimated the merged numbers put combined yearly earnings near minus $1 billion, after SpaceX burned about $14 billion in free cash flow last year and warned of more outlays ahead. Tesla, whose own earnings have slid toward $3.9 billion from $15 billion in 2023, leans on fading regulatory credits and on Bitcoin (BTC) holdings that swing its profit each quarter.

A deal would also dilute SpaceX backers, cutting their stake to about 52% even without a premium. They would then shoulder Tesla's heavy spending on robots, self-driving cars and data centers.

Musk has long folded his ventures together. He merged X with xAI, then sold both to SpaceX, after buying SolarCity with Tesla stock in a $2.6 billion deal in 2016. Skeptics at Oppenheimer countered that the two firms may serve him better apart, leaving his grandest deal unbuilt.

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