SpaceX, Tesla Form Independent Committees To Explore Merger: Elon Musk Says Deal ‘Not A Certainty’

• Musk added that he personally views a combination as a good idea, but emphasized that any transaction would require broad shareholder support.
• The special committees have not reached an agreement, and there is no certainty they will, Musk said. 
• The firm said on Tuesday that it had $63 billion in backlog or contracted revenue that is yet to be recognized, as of the end of the third quarter.

SpaceX and Tesla have formed special committees of independent directors to explore a potential combination, CEO of both companies Elon Musk said on Tuesday during SpaceX’s third-quarter earnings call amid heightened market speculation.  

‘An Odd Kabuki Dance,’ Says Musk

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The committees, he said, were established at the request of shareholders. The billionaire CEO added that he is excluded from the discussions owing to his position as leader of both firms.

“It is an odd kabuki dance where two groups of people are talking and I cannot be in the conversation,” Musk said. He cautioned against assuming a deal is inevitable. “I do not think we should necessarily assume that… a SpaceX and Tesla merger is a certainty. I think that would be overstating it.”

Musk added that he personally views a combination as a good idea, but emphasized that any transaction would require broad shareholder support. On the Tesla side, he noted, approval would need a majority of all outstanding shares—not merely a majority of shares voted—creating what he called “quite a high hurdle.”

“At this point, the special committees have not reached agreement on the terms of any transaction,” Musk said. “Obviously, there’s no guarantee that they will.”

While SPCX shares traded 8% higher after hours at the time of writing, TSLA was up 2%. 

Musk’s Rationale For Merger

Musk, however, outlined what he sees as the strategic rationale, pointing to overlapping work in “superintelligence,” or the company’s term for artificial intelligence endeavors. Areas of potential cooperation include superintelligence software, chip design, the Tesla-SpaceX Terafab semiconductor project, robotics, and mass-to-orbit capabilities tied to the Starlink constellation, he added.

Musk’s EV giant Tesla is slated to have its annual shareholder meeting on December 3. No merger proposal currently appears on the agenda for the meeting despite heightened speculation. Last week, Barclays said that they expect a merger announcement could arrive either tied to the shareholder meeting or in the coming 6-12 months, so it could be closed during the Trump Administration. Others, such as Cathie Wood’s Ark Invest, peg a merger could take place within the next five years.

First Quarterly Profit Since IPO Followed By Aggressive Outlook

SpaceX reported third-quarter revenue of $14.58 billion, compared to an estimated $13 billion, and earnings of $0.35 a share, against an expected $0.13. The beat was driven by a surge in superintelligence segment revenue, which trumped the Starlink connectivity business for the first time in the quarter.

The firm said on Tuesday that it had $63 billion in backlog or contracted revenue that is yet to be recognized, as of the end of the quarter. $42 billion of this is expected to convert within the next year, the company said.  

“Looking ahead, demand remains robust across all three segments, particularly in our cloud services business,” SpaceX CFO Bret Johnsen said while adding that the company remains on track for its previously stated goal of $100 billion in annualized revenue by the end of the year.

The company now expects $35 billion to $40 billion in capital expenditures in the fourth quarter, roughly twice at the upper end of the range as the $19.6 billion capex recorded in the third quarter, and gross margin in line with the second quarter when it recorded 55.3%. First quarter 2027 revenue will be $33-$37 billion, it added.  

How Did SPCX Retail Traders React?

On Stocktwits, retail sentiment around SPCX stock jumped from bearish to bullish territory over the past 24 hours, while message volume rose from normal to high levels.

SPCX closed Tuesday at about $148, higher than its IPO price of $135 but below its all-time highs near $226.

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