Live Markets: Analysts sketch out what a Tesla-SpaceX merger could look like

Tesla

Mon 17:05

Adds blog post
Nasdaq rallies ~1.5%, S&P 500 gains, Dow ~flat
Consumer Discretionary leads S&P 500 sector gainers; utilities is weakest group
Euro STOXX 600 index falls ~0.9%
Dollar gains; US crude edges up; bitcoin rises >1%; gold dips
US 10-year Treasury yield rises to ~5.14%
Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com
     
ANALYSTS SKETCH OUT WHAT A TESLA-SPACEX MERGER COULD LOOK LIKE
 Analysts at RBC and Barclays are weighing in on what a potential SpaceX-Tesla merger could look like as speculation about a deal between the Elon Musk-led firms has grown heading into their quarterly earnings updates later this week. 
The results will test whether Starlink's steady growth and Tesla's car profits can fund the AI spending powering the merger debate.
Merger speculation grew last week after Tesla TSLA.O unveiled a redesigned Roadster powered by rocket-style thrusters, developed in collaboration with CEO Elon Musk's rocket company SpaceX SPCX.O. 
"Beyond the financial models, we believe the case for a combined SpaceX/Tesla entity is grounded in a set of deeply intertwined operational synergies that make the whole greater than the sum of its parts," RBC equity analysts said in a note. 
RBC estimates that if SpaceX were to acquire Tesla, then the deal could value Tesla at $480 per share, with the combined equity value of the new company standing around $3.74 trillion. 
Barclays analysts also expect SpaceX to be the acquiring company due "to its dual-class share structure, which would enable Musk to hold outsized voting share." 
The analysts at Barclays see a few scenarios for when the merger announcement could come: one being Tesla's 2026 Annual General Meeting (AGM), which is scheduled for December 3.
If the announcement is not tied to the AGM, then the timing becomes unclear, with Barclays seeing an announcement coming within the next 6 to 12 months. RBC analysts were also uncertain about the timing of the announcement. 
Barclays also said that a deal announcement could wait until SpaceX's equity lockups pass, with some shares locked up until at least December 13. 
The main hurdle to the merger would be the shareholder votes, as both Tesla and SpaceX shareholders would likely have to approve the combination. 
Polymarket bets currently show a 64% chance the merger could happen by December 31, 2027.
     
(Shashwat Chauhan)
*****
     
EARLIER ON LIVE MARKETS:
DOWN FROM THE BASEMENT: HOMEBUILDER SENTIMENT SINKS TO LOWEST SINCE JUNE 2012 CLICK HERE
DOT-COM DEJA VU? WHY GOLDMAN SACHS IS CALLING TIME ON THE MOMENTUM TRADE CLICK HERE
WALL STREET'S YIELD WATCH MAY HOLD KEY TO STOCKS' NEXT MOVE CLICK HERE
AI TRADE REBOUNDS, BUT LEADERSHIP REMAINS NARROW CLICK HERE
NASDAQ BREADTH NEARS A PRIOR WASHOUT LOW CLICK HERE
INVESTORS LIKE EUROPE, JUST NOT THE EURO ZONE CLICK HERE
HAPPY HOUR IS OVER: SIN STOCKS FACE REFINANCING HEADWINDS CLICK HERE
ELECTION OPPORTUNITY FOR SPANISH BONDS CLICK HERE
EUROPEAN SHARES FALL, FRANCE UNDERPERFORMS CLICK HERE
EUROPE BEFORE THE BELL: ELEVATED OIL PRICES, RIOTING LEAVE FUTURES IN THE RED CLICK HERE
MARKETS LEFT TO FIGURE OUT SANCTIONS CLICK HERE