Tesla Is Down 16% This Year and Bettors Now Favor a Musk Merger With SpaceX
Options traders are betting on a single Elon Musk empire, and prediction markets now put the odds of a Tesla and SpaceX merger at better than coin-flip. What the latest delivery numbers, insider comments, and Polymarket contracts reveal about where…
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Options traders treat Tesla (NASDAQ:TSLA | TSLA Price Prediction) and SpaceX (NASDAQ:SPCX) as one Elon Musk trade. The two stocks now trade at a 30-day correlation of roughly 0.7, so when one of the stocks rises or falls, the other usually does, too. Tesla options drew over $400 million in total premium, with over 70% tied to calls. SpaceX options volume ran at more than twice the 30-day average, with over $250 million in contracts traded by mid-morning.
Options Flow Shows Traders Pricing a Single Musk Empire
SpaceX supplied the spark. The stock is on its best two-day run since August, up almost 12%, after its fastest-ever Falcon 9 launch-to-docking at the International Space Station, which took under eight hours. Tesla brought its own catalyst: Q3 deliveries of 486,000, ahead of the 462,000 analysts expected. By midday Monday, Tesla shares were up 2.2% at $378.79.
Polymarket Odds Now Tilt Toward a Merger by 2027
Polymarket turns that trade into clear odds. Traders put a 62.5% chance on a Tesla-SpaceX merger being officially announced by December 31, 2027, and that Yes price has risen 0.165 over the past month. The June 30, 2027 contract trades at 42.5%, although it fell 0.11 this past week. Earlier contracts with June 30 and September 30, 2026 deadlines both resolved No.
A Yes result would need an official announcement that one Musk company is acquiring or merging with the other, or a sale that transfers a controlling interest. An investment that stops short of control does not count. The market is also small, with total volume of about $277,000.
Existing Ties Keep Merger Talk Alive
The two companies already work closely together. Tesla is building a semiconductor fab with SpaceX at its Gigafactory Texas campus, and it has a $2B investment in xAI preferred stock. SpaceX already merged with xAI in February in a $1.25 trillion deal. In Q2 2026, Tesla booked a $1 billion mark-to-market gain on its SpaceX holdings.
Asked about combining the companies on the July call, Musk said, “Obviously, we can’t talk about combining companies,” and added that “it’s got to be done with the appropriate process.” On September 28, Jim Cramer said “there is nothing stopping” Musk from merging the two.
What Tesla Holders Should Track Before Any Deal News
Tesla shares are down 15.7% this year, from $449.72 at year-end 2025. SpaceX is up less than 4% since its June 12 debut. Tesla’s Q2 EPS of $0.33 missed the $0.54 estimate, and its operating margin narrowed to 1.4% as AI spending rose. Even after that miss, the stock trades at about 386 times earnings.
To be clear, no merger has been announced, so any business combination is speculation at this point. The next things to watch are Tesla’s Q3 report later this month and any potential hint of a deal from Musk or Tesla’s board.
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Gerelyn Terzo is the author of dividend investing handbook "Dividend Investing Strategies: How to Have Your Cake & Eat It Too." A veteran financial journalist, she covers agri-finance for outlets like Global AgInvesting and the broader stock market and personal finance for 24/7 Wall Street. She began at CNBC and later helped launch Fox Business in New York. Gerelyn currently resides in Woodland Park, Colorado and dabbles in nature photography as a hobby.
