Elon Musk’s dream merger is a nightmare for SpaceX shareholders
Source: Fortune ·
But Tesla shareholders should be cheering on the combination, especially if they get paid a fat premium.
From the source
The blowout news from SpaceX’s Q3 earnings wasn’t the rocket and AI giant’s outstanding performance that far exceeded even the analysts’ elevated expectations, but Elon Musk’s revelation that SpaceX and Tesla are weighing a merger. On the call, held the evening of October 20, Musk declared that his two signature holdings have each named “special committees” composed of independent directors to explore a union. Musk’s statement confirmed Wall Street’s long-held view that the union was highly likely, and now—given that Musk effectively controls both companies and loves the idea (though as a “conflicted party” can’t serve on the committees), the tie-up looks all but inevitable. The prospect of a SpaceX-Tesla combo got rave notices from the research crews covering both companies. In most cases where the acquirer is en route to paying a price amounting to a humongous PE, the acquirer’s stock falls. Not this time. This time, investors applauded both enterprises, sending Tesla up 3.4% the…