SpaceX, Tesla weigh possible mega-merger

SpaceX reported third-quarter 2026 revenue of $14.6 billion, an increase of 161% compared with the same period a year earlier. Operating income reached $2.8 billion and net income was $4.4 billion, exceeding market expectations for the privately held company. The results underscored rapid growth in SpaceX’s business and set the backdrop for new discussion of a potential corporate combination with Tesla.

Following the earnings release, reports indicated SpaceX shares climbed roughly 8–10% in after-hours and premarket trading. The move in secondary-market trading reflected a positive reaction to both the financial outperformance and comments about a possible merger with Tesla made on the company’s earnings call.

On the Oct. 20 earnings call, Elon Musk said SpaceX and Tesla have each formed special committees of independent directors to explore a potential merger of the two companies. He stated, "Do I think it would be a good idea? Yes," while emphasizing that he is a "conflicted party" and therefore cannot participate in the committees’ deliberations. The structure is intended to place the review of any transaction in the hands of directors deemed independent of Musk.

Musk explained that any combination would require shareholder approval at both companies, and set out a particularly stringent condition on the Tesla side. He said a deal would need the backing of holders of 50% of all outstanding Tesla shares, not just a majority of votes cast at a meeting, describing this as "quite a high hurdle." No transaction terms, exchange ratios or timelines have been disclosed.

One day after the SpaceX call, Tesla reported third-quarter 2026 revenue of $28.05 billion. The company also reported adjusted earnings per share of $0.48, beating Wall Street projections. Tesla shares rose modestly around the time of the earnings release, offering a more muted market response than the sharp move seen in SpaceX trading.

Analysts and coverage of the potential merger highlighted the scale that a combined company could achieve. At current market values, a merged Tesla–SpaceX entity was frequently estimated at around $3.5 trillion. That valuation would place the transaction among the largest corporate mergers ever proposed, underscoring both the financial significance and the complexity of any potential deal.

The exploration of a Tesla–SpaceX merger comes as both companies are reporting solid quarterly performance and attracting strong investor interest. The formation of independent special committees signals a formal process to evaluate whether combining the automaker and the space and satellite company would create additional value. However, the high shareholder approval threshold on the Tesla side and the absence of announced terms or timelines underline that a deal remains at an early stage.

For now, the main concrete developments are the creation of the committees, Musk’s explicit support in principle for a merger, and robust quarterly results at both firms. Investors will be watching for further disclosures from the boards of Tesla and SpaceX as the committees conduct their review and decide whether to advance any formal proposal.