How the SpaceX Stock Slump Complicates Elon Musk’s Tesla Merger

A potential merger between Elon Musk’s SpaceX and Tesla faces a growing problem: SpaceX’s falling share price could leave Tesla investors owning a much bigger piece of the combined company.

Shares of SpaceX (NASDAQ:SPCX) have fallen about 13% since Oct. 21, the first trading session after Musk disclosed that both companies were exploring a merger, while Tesla (NASDAQ:TSLA) has remained roughly flat.

The gap could force SpaceX to issue significantly more shares to acquire Tesla, making the deal less attractive to existing SpaceX investors, Barron’s reported Thursday.

The Merger Math Problem

SpaceX shares closed above $200 on June 16, shortly after the company’s IPO. At $200, a hypothetical deal offering Tesla shareholders a 15% takeover premium would have required approximately 2.3 SpaceX shares for every Tesla share.

At around $140, that figure rises to approximately 3.2 shares, according to Barron’s calculations.

In other words, SpaceX would need to issue roughly 40% more shares to buy the same company.

By Barron’s estimates, Tesla investors could end up owning more than half the combined business, compared with approximately 43% at the higher SpaceX share price.

SpaceX was trading around $138.50 Thursday, recovering from its Nov. 5 closing low of $123.62 but remaining well below its June peak.

The calculations are hypothetical. Neither company has agreed on merger terms.

Musk’s ‘Kabuki Dance’

Musk has acknowledged that bringing his companies together is no straightforward exercise.

“It’s sort of an odd kabuki dance where two groups of people are talking and I can’t be in the conversation,” Musk explained in October, referring to the independent committees exploring a possible merger.

Musk has called the combination a “good idea,” citing potential benefits from integrating SpaceX’s AI infrastructure and Starlink network with Tesla’s robotics, energy and chipmaking operations.

But shareholders may disagree on the price.

“My greatest concern is the price SpaceX would have to pay to acquire Tesla,” ERShares founder Joel Shulman previously told Benzinga.

Scott Galloway offered a sharper assessment, warning last month that Tesla is the “patient” and SpaceX the “organ donor,” arguing the merger could benefit Tesla investors at SpaceX shareholders’ expense.

Prediction markets remain optimistic. Traders on Polymarket assign a 54% probability to an official merger announcement by June 30, 2027, rising to 68% by year-end.

SpaceX’s falling valuation could help win over Tesla shareholders, who must approve a deal by a majority of all outstanding shares, while giving existing SpaceX investors more reason to object.

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