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Elon Musk Hints at Tesla-SpaceX Merger: “Who Can Imagine What Action One Might Take”

A joke and a hint from Elon Musk on stage just reignited speculation about combining two of the world's most valuable companies, and the governance and valuation questions that follow are ones Tesla shareholders cannot afford to ignore.

By Chris Lange
Published October 3, 2026, 9:15am ET · 3 min read

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A composite image with Elon Musk's face in the foreground, looking to the left. On the left side, a SpaceX Starship rocket is launching from Earth's atmosphere into a starry outer space. On the right side, a futuristic cityscape features a multi-lane highway with several Tesla Cybertrucks and other modern electric vehicles. A stylized silver and red logo, combining elements of Tesla and SpaceX, is visible at the top center.
Elon Musk stands prominently in an image that blends his two major ventures: a SpaceX rocket ascending into orbit and a futuristic cityscape bustling with Tesla vehicles, alluding to the article's discussion of a potential merger. © 24/7 Wall St.

In September, Elon Musk was asked on stage why Tesla (NASDAQ:TSLA | TSLA Price Prediction) and SpaceX (NASDAQ:SPCX) are still separate companies. He answered with a joke and a hint. On the All-In episode published September 15, 2026, where he appeared with Gwynne Shotwell, Musk said: “Yeah, great question. Wow. Nobody’s ever asked that one.” He then added: “With all this collaboration on so many levels, who can imagine what action one might take.”, according to Tesla

That is everything that happened. No board has approved a deal. No terms exist, and no one has named a completion date. Musk left the door open, and the size of the two companies makes that worth tracking: Tesla is worth about $1.47 trillion and SpaceX about $1.21 trillion.

TSLA price target

SPCX price target

Musk’s July Answer Had More Detail

The September joke followed a more careful answer on Tesla’s July 22 earnings call. An analyst at Wells Fargo (NYSE:WFC) asked about combining the companies. Musk said “we can’t talk about combining companies and that kind of thing” and that “it’s got to be done with the appropriate process.” Tesla’s general counsel then described “numerous beneficial transactions” with SpaceX, a relationship deepened “through an investment and a framework agreement.”

Shared Projects Already Run on Contracts

Tesla disclosed a about $2 billion investment in xAI Series E Preferred Stock in its Q1 2026 release. xAI’s Grok now sits inside SpaceX’s AI business. On the July call, Tesla’s finance chief said net income benefited from “a mark-to-market gain of $1 billion on our SpaceX holdings.” The two companies are building a semiconductor research fab at Gigafactory Texas. Grok runs in Tesla vehicles, Starlink is being built into the Cybercab, and SpaceX has bought Megapacks to smooth out power use during AI training runs.

All of this happens through contracts and a minority stake. The companies can work together without common ownership, so anyone pushing a merger has to show what combining adds that contracts cannot.

Exchange Ratio Decides Who Comes Out Ahead

SpaceX began trading on Nasdaq after its June 2026 IPO. SpaceX shares already trade publicly at $157.17. So any merger comes down to price. In an all-stock deal, each company’s shareholders get a negotiated share of the combined business.

The exchange ratio sets that share. It is the number of shares of one company that each share of the other converts into, and it reflects the valuations each board accepts, often plus a premium. A merger can create value overall and still move value from one shareholder group to the other if the ratio is wrong.

The terms would lock in a moment when the two businesses look very different. In Q2, Tesla revenue rose 25.5% to $28.24B. Operating income fell 56.9% to $398M, and non-GAAP EPS of $0.33 missed the $0.54 estimate. SpaceX revenue grew 92% to $7.81B, with AI revenue up 247%. Quarterly capex was $18.37B, and SpaceX’s filing shows $15.83B of that went to AI computing power. Tesla shares are down 16.98% year to date. SpaceX is down 2.35% since June 12.

TSLA earnings explorer

Governance Questions Tesla Holders Should Raise

Musk runs both companies, so every valuation question is also a conflict-of-interest question. These are the questions to ask:

  • Would each board set up a committee of independent directors with its own advisers and the power to turn down a deal?
  • Would the deal need approval from a majority of Tesla shareholders who are not connected to Musk?
  • How would the deal treat the 2025 CEO Performance Award, which is already pushing up stock-based compensation?
  • What does the framework agreement cover, and how are current deals between the two companies priced?
  • Who gets the fab’s chip output when both companies need more AI chips?

What to Watch Next

A real proposal would show up in SEC filings and on the Tesla and SpaceX investor relations sites. It would lay out the deal structure, the exchange ratio, and independent fairness opinions. Until that happens, Musk’s comments are a reason to value each stock on its own fundamentals and to have a clear view of what a fair ratio looks like before any proposal comes.

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Chris Lange

Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.

His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.

When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.

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