The financial world is abuzz with a radical theory regarding the future of Elon Musk’s empire. With Wall Street anticipating a blockbuster SpaceX IPO, some investors are suggesting a more disruptive path: a merger into Tesla.
The No IPO Prediction
Billionaire investor Chamath Palihapitiya has sparked intense debate by calling the absence of a SpaceX IPO his “most contrarian take for 2026.” He argues that instead of a traditional public offering, Musk will orchestrate a reverse merger, effectively folding SpaceX into Tesla.
- TSLA stock is moving. Investors are watching the chart and price action closely.
The Rationale
Chamath believes Musk wants to collapse his “two seminal assets” into a single cap table to solidify control and avoid the dilution of a standard IPO. The potential benefits of a merger include:
- Consolidation of Power: Musk can consolidate control and power of his two seminal assets into one cap table.
- Valuation Arbitrage: Musk could supercharge Tesla’s valuation, moving it toward a $3 trillion conglomerate by merging it with SpaceX.
AI Ecosystem View
Dan Ives of Wedbush Securitiesechoes the sentiment, viewing the separation of Musk’s companies as increasingly artificial. He believes there is a “growing chance” Tesla will be merged into a combined SpaceX-xAI entity.
- The view is that this growing AI ecosystem will focus on Space and Earth together, and Musk will look to combine forces.
Recent Moves
Recent moves, including the SpaceX-xAI merger, have created a $1.25 trillion entity focused on orbital compute. Tesla has also invested approximately $2 billion into xAI, framing the move as a cornerstone of its Master Plan Part IV.
Tesla Investor Dilemma
While the consolidation could solve funding needs for Mars colonization, it presents some risks:
- Pure-Play Loss: Many investors prefer pure-play stocks, and a merger could muddy the waters, potentially forcing institutional funds to sell Tesla shares if they are not permitted to hold aerospace assets.
- Regulatory Scrutiny: Such a massive merger would face unprecedented antitrust and SEC hurdles, particularly given Musk’s 42% ownership of SpaceX and his ~13% stake in Tesla.
Tesla investors will be watching for more evidence of a pending SpaceX IPO or more investment and consolidation within Musk’s companies. The potential merger of Tesla and SpaceX could have significant implications for the future of the companies and the investors involved.