SpaceX, Tesla weigh possible merger

SpaceX (SPCX) and Tesla (TSLA) have each created special committees of independent directors to evaluate a possible merger between the two companies. The formation of these committees was disclosed on SpaceX’s third-quarter earnings webcast on October 20, 2026. Elon Musk said the committees were set up at the request of shareholders and are composed of directors who are independent of management.

Musk stressed that the committees are still in an exploratory phase and that they have not reached agreement on the terms of any transaction. He noted that there is no certainty a merger will occur, despite the formal governance structures now in place to consider one.

During the webcast, Musk said that combining SpaceX and Tesla “would be a good idea,” signaling his personal support for a tie-up. At the same time, he described himself as a conflicted party and said he is recused from the committees’ deliberations. He reiterated that the groups are acting independently and that he cannot participate in discussions or negotiations they may undertake.

Musk explained that any merger would face a significant approval threshold on the Tesla side. He said a transaction would require backing from 50% of all outstanding Tesla shares, not just a majority of votes cast at a meeting. He characterized this as a high hurdle, underscoring that shareholder support will be decisive.

He also pointed to potential benefits from greater cooperation between Tesla and SpaceX in areas such as superintelligence software. However, he maintained that no terms have been agreed and emphasized the absence of a finalized deal.

The merger discussions emerged alongside a strong quarter for SpaceX. The company reported third-quarter revenue of $14.58 billion, a 161% increase compared with the same period a year earlier. Net income for the quarter reached $4.4 billion, highlighting robust profitability.

Executives paired the results with forecasts of rapidly higher annual recurring revenue targets, framing the quarter as part of a broader growth trajectory. The earnings performance provided the financial backdrop for the merger exploration, demonstrating the scale and momentum SpaceX has built.

Following the earnings release and Musk’s comments on a potential merger, SpaceX shares rose in after-hours or postmarket trading. The move suggested a positive investor response to both the company’s financial results and the prospect of closer integration with Tesla.

Tesla shares also advanced, though the gains were more modest than those seen in SpaceX. Trading reflected both interest in the strategic possibilities of a combination and recognition that the process remains at an early, uncertain stage, with special committees still evaluating whether and how to proceed.