Musk Confirms SpaceX (SPCX) and Tesla (TSLA) Merger Committees With $3.5 Trillion at Stake

Special Committees Set Up, No Terms Agreed

Elon Musk said on the post-market earnings call for SpaceX (SPCX) on October 20 that the company and Tesla (TSLA) have each formed a special committee of independent directors to discuss a merger. He said he cannot join either panel because he is the conflicted party, a setup he likened to a “strange kabuki performance” in which two groups negotiate while he waits outside, and he noted the committees were created at shareholders’ request. Asked whether a deal is already done, he called that overstated, answered “Do I think this is a good idea? Yes,” and added that the two panels have not reached consensus on any transaction terms, with no agreement guaranteed. The process runs in two steps: the committees negotiate terms, then shareholders vote. The Tesla bar is the harder one, requiring approval from a majority of all outstanding shares rather than votes cast, a threshold Musk called “quite high.” Neither company has said who sits on the committees or when they were formed. A proxy statement Tesla filed with the SEC on October 19 lists only three items for the December 3 annual meeting: the re-election of Musk, Robyn Denholm and JB Straubel, an advisory vote on executive pay, and the ratification of PwC as auditor. Any merger would go to shareholders in a separate vote. The boards already overlap: venture investor Ira Ehrenpreis and Musk’s brother Kimbal Musk sit on both, and neither company says whether they joined the panels. Musk holds roughly 20% of Tesla and about 45% of SpaceX with around 82% of its voting power, and the two companies’ combined market value was about $3.5 trillion at the October 20 close. The tone marks a shift from July 22, when he declined on Tesla’s second-quarter call to discuss a merger and handed the question to Tesla’s chief legal officer. SpaceX closed the regular session at $147.79, nearly flat, touched $165.25 after hours and ended that session at $159.70, up about 8%. Tesla finished at $373.71 and traded near $380.29 after hours.

Q3 Revenue Up 161% to $14.58 Billion

The third-quarter shareholder letter filed alongside the call shows revenue of $14.58 billion, up 161% from $5.576 billion a year earlier and above the roughly $12.9 billion analysts expected. The Super Intelligence (SI) segment, renamed from AI, booked $7.56 billion in revenue, close to triple the second quarter’s $2.561 billion, and surpassed Starlink’s $5.248 billion for the first time; launch brought in $1.767 billion. SpaceX credited new cloud service contracts, the Cursor acquisition completed on August 14, which added $608 million in the period, and rising Grok usage. Operating income reached $2.791 billion and net income $4.404 billion, against a $1.054 billion loss a year earlier, with earnings per share of $0.35 beating the $0.14 estimate. The swing is not purely operational: the first nine months remain a cumulative loss of $413 million, and the quarter included $1.025 billion of other income and a $390 million tax benefit. The Link business that houses Starlink grew revenue 69% and operating profit 99%, earning a 45.1% segment margin against SI’s 5.7%. Starlink’s consumer base reached 13.6 million subscribers paying about $69 a month, and enterprise and government revenue rose 91%. Capital spending ran to $19.593 billion, with $16.444 billion, about 84%, absorbed by SI. CFO Bret Johnsen guided fourth-quarter capex to $35 billion to $40 billion and repeated a $100 billion annualized revenue target, calculated as December’s monthly revenue times twelve: with the third quarter averaging about $4.86 billion a month, December would need roughly $8.3 billion, some 70% above the current run rate. The company ended September with $89.855 billion in cash and marketable securities even as free cash flow turned negative for the quarter. Musk said 2.5 to 3 gigawatts of compute will be running by the end of 2026, with 10 gigawatts added in 2027 and another 20 gigawatts of power and cooling planned; about 200,000 Nvidia GB300 chips deploy each month for the rest of the year, and a training cluster of 440,000 Vera Rubin computers is due by the end of the second quarter of 2027. He put the payback on new compute at under a year and projected $500 billion to $1 trillion in annualized recurring revenue by the end of 2027, a management forecast rather than booked business.

SpaceX trades at $161.85, up 9.12%, per COINOTAG’s live data, near the top of a $143.62 to $162.18 range and between support at $158.21, a Bollinger Bands midpoint scored 84 out of 100, and resistance at $163.46, scored 58/100; the session high of $162.18 has not tested that resistance since the call. Tesla sits at $380.28, up 3.22%, with a bullish daily MACD signal while SpaceX’s stays bearish, a split that mirrors one company absorbing a capex surge and the other waiting on a vote. Perpetual open interest in SpaceX stands near $533 million. Sell-side estimates give the merger talk a floor: Dan Ives puts the odds of a deal by the end of 2027 at 80% to 90%, and RBC’s Tom Narayan assumes a price near $480 a share, roughly a 30% premium for Tesla holders.