Elon Musk has voiced support for a potential merger between SpaceX and Tesla, saying the combination has merit while stressing that the decision rests with independent committees at both companies.
According to a report by CNBC, Musk confirmed that both companies had formed committees of independent directors at shareholders’ request to consider the proposal. He said he would not participate in the discussions because he is a “conflicted party” with interests in both companies.
He also warned against assuming a deal would proceed, saying that treating a merger as certain “would be overstating it.” He added, “Do I think it would be a good idea? Yes.”
During SpaceX‘s third quarter earnings call, Musk said, “This is definitely kind of a question where I feel like I’m tap dancing through a minefield… but I do think there’s a lot of merit to combining the companies.”
His comments coincided with SpaceX reporting third quarter revenue of US$ 14.58 billion, above analyst estimates of US$ 12.94 billion. Earnings reached 35 cents per share, exceeding expectations of 16 cents. Revenue from its Super Intelligence segment increased 830 percent year over year (YoY) to US$ 7.6 billion.
Tesla and SpaceX shares gained in premarket trading on Wednesday October 16, Tesla rose 2.03 percent to US$ 383, while SpaceX climbed 8.74 percent to US$ 160.70 as reported by Tradingkey.
SpaceX also reported net income of US$ 4.4 billion, returning to profit after two consecutive quarterly losses. Currently SpaceX market capitalization stands at US$ 2.01 trillion while Tesla market capitalization is US$ 1.50 trillion.
Despite falling 32 percent from its IPO, SpaceX retains strong analyst support, with 28 of 35 analysts maintaining Buy ratings, and a consensus price target suggesting 46 percent upside as detailed in a report by 247wallst. RKLB, is down 15 percent over the past month but up 37 percent YoY, with lower analyst-implied upside than SpaceX. Meanwhile, SpaceX’s AI segment grew 247 percent YoY to US$ 2.6 billion in quarterly revenue, with management targeting a US$ 100 billion annualized run rate by December.