SpaceX's market capitalization exceeded that of Tesla on its very first day of trading, with its president already hinting at a potential merger between the two companies.
On June 12 local time, SpaceX officially debuted on the U.S. stock market, launching the largest IPO in history with an offering price set at $135 per share. On its first trading day, the stock opened at $152, surged to a high of $173, and closed with a gain of over 30%, achieving a market capitalization of approximately $2 trillion.
According to FactSet and Dow Jones Market Data, this valuation represents about 3% of the total U.S. stock market capitalization of $75.6 trillion, propelling SpaceX to become the sixth-largest listed company in the United States. Its market cap now surpasses that of Meta and Saudi Aramco, as well as Elon Musk's other company, Tesla Motors (TSLA), which currently holds a market value between approximately $1.25 trillion and $1.5 trillion.
On the same day, SpaceX President Gwynne Shotwell, when asked by media about the possibility of a merger between Tesla and SpaceX, offered a thought-provoking response.
The Meaning Behind Shotwell's Words
Shotwell stated, "It might make Elon's life a little easier."
She elaborated, "There are undoubtedly synergies between Tesla and SpaceX, and there is a convergence in our future directions—what we are both striving to achieve is coming together."
However, she also applied the brakes: "My focus right now is keeping the lights on at SpaceX. That part of the future, at least for now, is not my focus."
The significance of these remarks lies in the fact that Shotwell neither denied the possibility of a merger nor provided any timeline. For the market, this was sufficient.
Collaboration between the two companies has long been evident. Tesla has purchased $506 million worth of SpaceX Megapack energy storage batteries and $103 million worth of Cybertrucks for the SpaceX campus. The two are also jointly advancing a $55 billion "Terafab" chip factory to produce semiconductors for robotics and space travel. Furthermore, Tesla invested $2 billion in Musk's AI company, xAI, last year. Following SpaceX's all-stock acquisition of xAI (valued at $250 billion) in February this year, Tesla's investment automatically converted into approximately 19 million shares of SpaceX.
Based on SpaceX's first-day closing price, Tesla's stake is valued at approximately $3.29 billion, representing a paper gain of about 64%.
Market Bets on a Merger
This is not merely an offhand topic.
Wedbush Securities senior analyst and Tesla bull Dan Ives wrote in a research report this week that he expects Tesla and SpaceX to merge next year, characterizing it as a "holy grail" move—a merger that would allow Musk to control a larger portion of the AI economy. Ives estimates an 80% to 90% probability that the two companies will announce a merger before the first half of 2027.
Data from prediction markets is more direct: On the Kalshi platform, the trading price for contracts related to "Tesla-SpaceX announcing a merger before May 2027" has jumped from 26% at the beginning of the year to 55%.
Following SpaceX's listing, over 20 ETFs launched products linked to SpaceX within hours, highlighting the market's fervor.
Musk has a precedent for consolidating his companies. In 2016, Tesla acquired solar company SolarCity for $2.6 billion in stock. After acquiring Twitter, he merged it with xAI, valuing the combined entity at $50 billion. In February of this year, SpaceX brought both xAI and X under its umbrella.
Tesla Investor: I'm Not Buying SpaceX, I'm Waiting for the Merger
Tesla long-term investor and CEO of L&F Investor Services, Alexandra Merz, explicitly outlined her rationale in a Bloomberg Television interview:
"My judgment is that Tesla and SpaceX will merge. As a fully invested Tesla investor, if I were to buy SpaceX, I would have to sell Tesla, which is something I will not do. So my strategy is to hold Tesla. If my judgment is correct, they will announce a merger within weeks and complete it in the first half of 2027."
Merz, who has nearly 240,000 followers on platform X and claims to hold "thousands" of Tesla shares, represents the mindset of a segment of Tesla shareholders: rather than buying SpaceX at potentially high IPO prices, it's better to hold Tesla and automatically own the merged entity post-merger.
Early SpaceX private investors, such as XPrize Foundation founder Peter Diamandis, share a similar view, believing Musk's desire for control over his companies will drive this merger, much like the logic behind SpaceX merging with xAI.
Merger Rationale and Hurdles
Numerically, a merged entity could have a market capitalization exceeding $3 trillion, potentially surpassing Amazon and Microsoft to become the world's fourth-largest company.
From a governance perspective, Musk holds approximately 85% of the voting rights at SpaceX, meaning resistance from the SpaceX board is virtually nonexistent. At Tesla, he currently owns about 13% of shares, but if the compensation package approved by shareholders last November is fully realized, his stake could increase to around 25% over the next decade.
Experts have indicated to CNBC that regulatory hurdles for a merger are relatively limited due to the companies operating in different business areas. The real complexity lies in governance details: which company would be the surviving parent? How would the new company's stock be priced? What would the share exchange ratio be?
Additionally, some analysts urge caution. Some warn that a merger could potentially dilute Tesla shareholders by approximately 28%, a point worth noting.
137 Ventures Managing Partner and early SpaceX investor Christian Garrett defended Musk's voting structure in a Bloomberg Television interview, stating that such governance arrangements "bring stability to the company, and that's exactly what you want when you're investing in a project pursuing intergenerational opportunities."
As for Musk himself, Shotwell offered her assessment: "Without Elon, the company obviously wouldn't collapse, but it definitely wouldn't be what it is today."