Elon Musk suggests a potential merger between SpaceX and Tesla despite recent market fluctuations making the deal more complex.

Elon Musk indicated that a merger between SpaceX and Tesla is a strong possibility during a Q2 earnings call. While Musk noted that the companies already share significant overlap—including the Grok AI chatbot and Starlink satellite integration—he emphasized that a formal union requires an appropriate process. The timing of a potential deal has become more challenging due to recent stock volatility. Following SpaceX's June 12 IPO, its valuation reached $2.8 trillion, making it an attractive "currency" to acquire Tesla, which was valued at $1.6 trillion. At those prices, SpaceX shareholders would have retained nearly two-thirds of the combined entity. However, both stocks have recently dropped significantly. SpaceX fell 46% to a market cap of $1.49 trillion, while Tesla retreated 24% to $1.22 trillion. At these current valuations, SpaceX would need to issue 82% of its shares to acquire Tesla. This massive dilution would leave SpaceX investors with only a 55% stake, potentially making the deal less attractive for all shareholders unless the market stabilizes.

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