SpaceX has also well and truly eclipsed Musk’s other company with a gravity-defying stock, Tesla Inc. If the present trend holds, that should make it much easier for Musk to merge them into one sprawling, listed, multitrillion-dollar empire, potentially rivaling Nvidia Corp. for the title of the world’s most valuable listed company.
Musk’s assiduous melding of narratives at the two companies, centered on artificial intelligence, provides a strong rationale for him to combine them, as does his evident desire for greater control over Tesla and that company’s faltering growth and imminent cash burn (I wrote about all this here). That logic, and Musk’s dominant role at both companies, creates a potential conflict of interest because it would advantage the likely acquirer, SpaceX — where Musk has far greater control and now derives the vast majority of his net worth — if Tesla became relatively cheaper.
The market is doing that job already, and quickly. These are early days for SpaceX stock, of course. Its current price is even less tethered to reality than is usual for a Musk-led company given the confluence of its limited free float ahead of lockups expiring, the start of options trading, plus lingering IPO hype before any formal results. Still, if SpaceX’s relative ascendence versus Tesla holds, it would smooth an all-stock deal.
The exchange ratio, which shows how many SpaceX shares would need to be handed over to cover one Tesla share, tells the story. That number has fallen 32% already. SpaceX was valued about $266 billion more than Tesla when it priced. That has widened to $1.1 trillion.
