During a call with Tesla shareholders, Elon Musk stated he had already addressed the topic of a merger with SpaceX, despite the ongoing speculation that has captured Wall Street's attention. Musk expressed support for the idea, revealing that both companies have established special committees to explore the possibility.
This merger discussion comes at a time when Tesla's earnings report showed a decline in auto revenue and a significant drop in its energy business, leading to a 3% drop in Tesla's stock and a 9% decline in SpaceX's stock.
Analysts from William Blair noted that Musk's interest in a merger appears to be more about maintaining control rather than enhancing business synergies, as he already operates both companies in a highly integrated manner.
Musk's voting power at SpaceX, where he holds 10-to-1 supervoting shares, contrasts with his 19.8% ownership stake in Tesla, which requires a 50% vote from all shareholders for any merger decision.
Legal experts suggest that a merger could address shareholder concerns regarding Musk's divided attention between the two companies, but significant regulatory hurdles, particularly concerning antitrust and national security, could complicate the process.
The potential merger is further complicated by the need to navigate international regulations, especially in critical markets like China, where Tesla generates a substantial portion of its revenue.
Despite the challenges, some analysts believe that a merger could be announced quickly, possibly before the upcoming midterm elections, as Musk has been actively consolidating his business interests recently