{{ According to TheFly, RBC Capital’s top analyst, Tom Narayan, just reframed Tesla as much closer to an AI infrastructure platform, with vehicles, batteries, chips, Robotaxis, humanoids, and possibly SpaceX all feeding into one massive Musk-led ecosystem.
Narayan raised his Tesla price target to $500 from $475 and kept a buy rating, arguing that recent talk of a potential Tesla-SpaceX combination has compelled investors to contemplate what a merged company could look like, especially if SpaceX acquired Tesla in an all-stock deal at a premium. }}
Which is exactly why I closed my Tesla short at a teensy tiny loss. If he can make SolarCity shareholders whole overnight, he can do anything with Tesla share prices too. Since he entirely controls SpaceX and mostly controls Tesla, he can (in theory) do anything he wants, and I don’t like that. I invest the old fashioned way: companies with earnings and history, and once in a while a bet on a comer with what I think is a future.
How? Tesla stockholders would suffer a massive dilution. SpaceX is not worth much more than Tesla (2.2T vs 1.5T) . Perhaps since the same guy effectively owns both, it does not matter what it would do to the other shareholders.
I would imagine that both the Tesla shareholders (through legal means) and the government might object.
Regulatory concerns could also prevent or constrain a merger. SpaceX is a large US government and military contractor, while Tesla has major auto and battery operations in China. This could raise scrutiny from US regulators, related to national security concerns in the company’s supply chain.
As the OP mentioned, the deal would likely be at a premium to the present TSLA price (as most buyouts/acquisitions are). Sounds good to me, although I’m not a shareholder.
Just because a transaction benefits someone financially doesn’t automatically make a transaction legal, fair, ethical, or even smart.
The potential for self dealing in a situation like this is very high. If Tesla hadn’t purchased Solar City at a premium, Elon Musk’s $500 million stake in Solar City would have gone to zero.
It is fair and reasonable that there should be guardrails in place to protect shareholders from self-dealing in situations like this. I don’t understand why this is controversial.
Yep. If SpaceX acquired Tesla at $500/share tomorrow, it would be dilutive to SpaceX shareholders. That’s why I think it’s unlikely before Dec 08, the date employees can unload all their SpaceX shares.
The ceo has had such a change of heart on private vs public companies.
When discussing taking Tesla private at $420 a few years back, he wrote so eloquently about all of the benefits of a private company, including SpaceX specifically.
Now I suppose public is the better way, despite being far less operationally efficient?
SpaceX is a perfect example: it is far more operationally efficient, and that is largely due to the fact that it is privately held.
