Why odds of SpaceX merger with Tesla keep climbing every time the stock shoots up

In a CNBC interview on June 12, host Morgan Brennan asked Space X president and COO Gwynne Shotwell whether the rocket and AI player might buy Elon Musk’s second largest holding, Tesla. She didn’t dismiss the possibility, and even suggested that it might make sense. “There’s a convergence we’re all trying to accomplish in the future,” she declared, adding that the tie-up “might make Elon’s life a little easier.” Since Space X’s stupendous debut hours after Shotwell’s CNBC appearance, the math governing a potential union has improved substantially. The reason: SpaceX shares have shot to such celestial heights that it can now purchase Tesla by offering far less stock than would have been required had its valuation settled at its pre-trading level. That scenario makes it easier to solve a nagging problem that plagues the Musk empire: How to bail out Tesla. The EV-maker’s fundamentals are getting weaker and weaker. In the past four quarters, Tesla posted just $3.4 billion in GAAP net earnings down from $15 billion in 2023 and $7.0 billion in 2024. Yet its market cap is still hovering around $1.5 trillion, a number almost entirely based on Musk’s promises of big profits from robots and self-driving cars, products not yet selling, and whose advertised entry on the market keeps getting delayed. In fact, many on Wall Street fear that Tesla’s notched that astronomical market cap less on hopes of wonders to come, and more on the possibility SpaceX will bid something close to what the carmaker’s selling for to clinch a colossal takeover. Here’s how the new numbers make a transaction a lot more attractive for Musk and his fellow SpaceX shareholders, at least in theory. At the offer price of $135 a share, SpaceX would have boasted a valuation of around $1.75 trillion—you saw that number quoted everywhere, pre-June 12. Hence, if SpaceX bought Tesla in an all-stock transaction, and both p