Elon Musk sees 'a lot of merit' in combining Tesla and SpaceX, but says the decision is not his to make, according to a report published by The Express Tribune. Musk has described himself as a 'conflicted party' in the matter.
Who decides
Two special committees that Musk cannot sit on are weighing the terms and have not yet agreed, the report said. A Tesla shareholder vote would follow, which Musk calls a high hurdle because, he said, approval would need a majority of all shares, not just those voted.
Many Wall Street analysts nonetheless see a deal as inevitable and expect one by the end of next year. SpaceX shares rose 8.4% and Tesla gained 1.5% in premarket trading.
AI as the common thread
The two companies are jointly developing the Terafab chip plant, and AI now accounts for more than half of SpaceX's revenue, the report said. Analysts say heavy spending on AI and space infrastructure will weigh on SpaceX's free cash flow, a strain a combined company could ease by sharing services and borrowing jointly.
The question of control
Musk holds about 85% of SpaceX's voting power through super-voting shares, but roughly 20% at Tesla. Bill Birmingham of REX Financial estimates a merger would give him about 57% of voting rights. No exchange ratio has been negotiated.