SpaceX buying Tesla would cost SpaceX shareholders nearly half their company in exchange for very little profit, argues Shawn Tully at Fortune, after Elon Musk said on SpaceX’s October 20 earnings call that both companies had set up committees of independent directors to study a merger. At a typical 30% premium, Tesla would cost about $1.98 trillion in SpaceX stock, roughly $600 for every dollar of Tesla’s $3.28 billion in profit over the past year, and Tesla’s earnings are falling while SpaceX’s are rising. Tully adds that both companies are spending far more than they bring in on AI, robots, and robotaxis, so Tesla can’t help cover SpaceX’s cash burn. He says Tesla shareholders would be the winners, since a buyout is what props up Tesla’s stock.
