Barclays flags possible Tesla-SpaceX merger announcement before December
The same bank has separately started coverage of SpaceX at Overweight with a $254 price target, according to TradingView.
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Chart: TSLA, one-minute prices, three sessions
Barclays told clients a formal announcement on combining Tesla and SpaceX could come before December, the bank said, adding a timeline to speculation that has circulated around Elon Musk's two companies for months.
No merger has been confirmed by either company. As of October 5, neither Tesla's nor SpaceX's SEC filings showed a merger agreement, a special committee or an S-4 registration describing talks, according to PurePowerPicks. Musk himself has stopped short of confirming anything, saying on July 22 that combining the companies would need "the appropriate process," and telling an interviewer on September 14 that "who can imagine what action one might take" given how closely the two already work together, PurePowerPicks reported.
Analysts have sketched out what a deal might look like. RBC Capital's Tom Narayan has said the most likely structure is an all-stock transaction in which SpaceX acquires Tesla at a 20% to 30% premium, putting Tesla's value at $435 a share before any premium and $500 with it, according to IndMoney. Wedbush's Dan Ives has put the odds of a merger within a year above 80%, IndMoney said. Tesla currently holds about 19.0 million SpaceX Class A shares, under 1% of the company, the result of a roughly $2 billion investment, PurePowerPicks reported. SpaceX has already absorbed one Musk company this year, merging with xAI in February in a deal valued at $1.25 trillion, according to 24/7 Wall St.
A merger call would settle a question that has hung over Tesla's valuation as Musk's attention and wealth have shifted toward SpaceX, whose shares have climbed 13% this month and now account for the bulk of his net worth alongside Tesla. Folding SpaceX into Tesla's public structure would bring with it SpaceX's financing needs, including a $40 billion Nvidia chip facility, along with its spectrum rights and Starlink expansion, adding complexity just as Tesla works through Cybercab certification and Optimus production questions. Barclays raising the prospect of an announcement before December pushes the idea from rumor toward a near-term event, and could turn investor attention away from Tesla's vehicle deliveries and toward how a combined company would be valued and governed.