With SpaceX marching toward what could be the largest initial public offering (IPO) in history, new language in the company’s amended S-1 filing has poured rocket fuel on a long-standing rumor: that Tesla (NASDAQ: TSLA) and SpaceX could be considering a merger.
In the original S-1, SpaceX wrote, “We may issue additional shares for a variety of corporate purposes, including future public offerings to raise additional capital, corporate acquisitions and employee benefit plans.” This is about as boilerplate legalese as it gets in a Securities and Exchange Commission (SEC) document
Now, the space exploration unicorn says, “We may issue a significant amount of equity in connection with future transactions.” While the difference between these two statements is subtle, I think the updated verbiage could be a quiet signal that Elon Musk’s two biggest giants could one day combine. Let’s explore what the rationale would be for a SpaceX-Tesla merger and assess the implications for investors. Would SpaceX merge with Tesla?
Combining SpaceX and Tesla would not be a transaction born of desperation, but rather a deal based on their numerous complementary strengths and shared ambitions in the realm of artificial intelligence (AI). For instance, Tesla’s battery technology and manufacturing scale could help accelerate the production of SpaceX’s rockets and the deployment of Starlink satellites. Meanwhile, SpaceX’s orbital infrastructure could provide Tesla’s vehicles and anticipated Optimus humanoid robots with broader connectivity.