SpaceX stocks drop 2.59% as Barclays flags potential merger before December 6

SpaceX's (SPXC) share price fell 2.59% yesterday on rumours of a merger with Tesla (TSLA). The stock fall was less about the rumoured merger and more about the drop in AI stocks.

According to Barclays analysts, headed by Dan Levy, the merger of both companies run by Elon Musk could happen before the annual general meeting of Tesla, scheduled no later than December 6. This will allow the deal to be voted on during the same general meeting.

Dan Levy's team believes that the merger will be seen as a vertical integration deal for both companies to use artificial intelligence, combining the physical AI of Tesla (Robotaxi and Optimus) with the virtual AI of SpaceX (Grok and Macrohard). Although there will be some financial synergies, the core of the deal lies in combining both companies' artificial intelligence technology.

Then there’s the issue of control. Assuming SpaceX merges with Tesla, which is very likely considering its dual-class structure, Musk will own roughly 37% of the new entity but with 56% of voting rights. According to Levy, each Tesla share will get approximately 0.7 SpaceX shares, with the premium priced into the ratio.

Musk has even been feeding this fire. During the Q2 earnings call of Tesla, when asked whether a merger is possible, he responded, "There's more and more overlap, especially with Terafab; that's really going to be a gigantic product." Musk continued at the All-In Summit held last month: "With all this collaboration, on so many levels, who can imagine what action one might take when there's so much close collaboration in so many areas."

Tesla stock is down by more than 1% in pre-market trading on Thursday morning. SpaceX is valued at $2.06 trillion while Tesla starts the day with a $1.45 trillion market capitalisation. Tesla will report Q3 earnings on October 21.