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SpaceX to Buy Tesla? Analyst Weighs In
19 Oct
Summary
- SpaceX would need to acquire Tesla in an all-stock deal.
- A premium price for Tesla could reach $480 per share.
- The merger's combined company split is estimated at 50/50.
RBC Capital Markets analyst Tom Narayan has outlined a hypothetical scenario for a merger between Tesla and SpaceX. He suggests that for such a combination to occur, SpaceX would likely need to acquire Tesla.
Narayan envisions this as an all-stock deal. He notes that Elon Musk controls a significant majority of SpaceX's voting power but not Tesla's. Therefore, a substantial premium would be necessary to facilitate the acquisition of Tesla.
The analyst projects a potential stock price of $480 for Tesla, representing their price target and intrinsic value plus a premium. This valuation, based on SpaceX's current stock price, implies an equal 50/50 ownership split in the merged company.
Some SpaceX shareholders might find this split unfavorable, believing SpaceX contributes more value, potentially 60-70% of the combined market capitalization. Despite the complexities, Narayan posits that both sets of shareholders could support the merger if the financial terms are agreeable.
