![](\"https:\/\/www.thestreet.com\/.image\/NDA6MDAwMDAwMDAzMjMwMjg0\/tesla-and-spacex.jpg?profile=rss\")
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When two companies merge with stock, nobody hands you cash. You trade one set of shares for another and hope the swap was fair.<\/p>\n
That trade happens whether you pay attention or not. If you own a broad index fund, it can happen inside your 401(k) without a single click from you.<\/p>\n
Tesla (TSLA) is big enough that plenty of people hold it that way. The automaker reported $28.05 billion in third-quarter revenue and delivered 486,532 vehicles.<\/p>\n
SpaceX (SPCX) is worth about $1.83 trillion, and Tesla about $1.58 trillion. Elon Musk runs both, and he sees “a lot of merit” in combining them, he said on SpaceX’s Oct. 20 earnings call.<\/p>\n
However, a subtle shift has emerged in how Wall Street talks about a deal. The question is no longer whether it makes sense. It’s what Tesla shareholders would actually get.<\/p>\n
According to a Bank of America research report seen by TheStreet, Tesla holders should expect a premium if SpaceX buys the company, but a tough shareholder vote and China stand in the way.<\/p>\n
Bank of America sees a 20% to 30% premium for Tesla holders if a SpaceX merger goes through.<\/p>\n
MAGWIN \/ Getty Images<\/p>\n
What a Tesla-SpaceX swap would look like by the numbers<\/p>\n
Terms haven’t been agreed upon, and a deal is far from certain. Musk himself called the Tesla vote “quite a high hurdle.”<\/p>\n
Analyst Alexander Perry laid out the math in an Oct. 29 note titled “Thrusters included: Potential merger adds optionality on top of the autonomy ramp.”<\/p>\n
“We think a logical structure could be an all-stock acquisition of Tesla by SpaceX, with Tesla shareholders receiving newly issued SpaceX shares,” wrote Perry.<\/p>\n
Related: Elon Musk doubles down on the Roadster with SpaceX thrusters<\/p>\n
At Oct. 20 closing values, a swap with no premium would leave Tesla holders with 42.4% of the combined company, Perry wrote. Musk would hold 36.3% of the economics and 55.6% of the vote.<\/p>\n
Perry expects the Tesla board’s special committee to push for more. Here’s how his scenarios stack up:<\/p>\n
No premium: About $374 a Tesla share, with Tesla holders owning 42.4%<\/p>\n
20% premium: About $449 a share, with Tesla holders owning 46.9%<\/p>\n
25% premium: About $467 a share, with Tesla holders owning 47.9%<\/p>\n
30% premium: About $486 a share, with Tesla holders owning 48.9%<\/p>\n
Even at a 30% premium, Musk would keep 51.6% of the vote, the note showed.<\/p>\n
Why the market already moved the math<\/p>\n
Here’s the part I’d focus on. The stocks have moved since Oct. 20, and that changes the starting point.<\/p>\n
More on Tesla and SpaceX:<\/p>\n
SpaceX shares soar on possible tie-up with Tesla<\/p>\n
Bank of America sends SpaceX stock investors strong signal<\/p>\n
Tesla stock sellers should pump their brakes, 5-star analyst says<\/p>\n
Tesla closed at $399.81 on Oct. 30. SpaceX fell 6.4% that day to $134.72.<\/p>\n
By my math, an at-market swap at those prices works out to about 2.97 SpaceX shares per Tesla share. That’s close to the 3.03 ratio in Perry’s 20% premium case.<\/p>\n
Using the share counts in his note, Tesla holders would own about 46% of the combined company with no premium at all.<\/p>\n
In other words, the market has already handed Tesla holders part of the premium Perry expects them to negotiate.<\/p>\n
That cuts both ways. A committee asking for 25% on top of today’s price would be asking SpaceX for a lot more stock.<\/p>\n
Given that backdrop, it’s easy to understand why Perry thinks the strategic case rests on shared costs rather than goodwill. The clearest example is Terafab, the companies’ joint chip project.<\/p>\n
The companies “have yet to agree how to split Terafab’s costs, which Musk expects to exceed $100bn long term, and a merger would remove that negotiation,” wrote Perry.<\/p>\n
The business ties already run deep. SpaceX bought $626 million of Tesla Megapacks through the third quarter, including $221 million in the third quarter alone, Perry wrote.<\/p>\n
The vote and China could still stop it<\/p>\n
Bank of America sees two big hurdles before any premium matters.<\/p>\n
The first is the vote. Tesla’s charter requires approval from a majority of all outstanding shares, and abstentions and broker non-votes count against a deal, Perry wrote.<\/p>\n
He pointed to 2025 as a warning. Tesla’s advisory proposal to invest in xAI drew 1.06 billion votes for and 916 million against, but it still failed on 473 million abstentions, the note showed.<\/p>\n
By my math, abstentions made up about 19% of the votes cast on that proposal. A merger vote would face an even higher bar, because unvoted shares would also count as no votes.<\/p>\n
The second hurdle is China. “We view China as the main regulatory risk as a potential deal would place Tesla’s Shanghai plant, which builds roughly half of its global vehicle output, under a major U.S. defense contractor,” wrote Perry.<\/p>\n
He expects a firewall that keeps Tesla China’s data and staff apart from SpaceX’s defense work, the approach used by companies such as Airbus and Honeywell.<\/p>\n
Much will likely depend, however, on timing. Bloomberg reported a push to announce a deal by the first half of 2027, Perry noted, though the companies haven’t confirmed it. Tesla’s Dec. 3 annual meeting doesn’t include a merger vote.<\/p>\n
I’d also keep an eye on the money.<\/p>\n
Perry forecasts negative free cash flow of $4.6 billion this year and $11.3 billion in 2027 as capital spending climbs to about $25 billion a year, the note showed. A cash-hungry Tesla gives SpaceX the upper hand at the bargaining table.<\/p>\n
Perry kept his Buy rating and $460 price objective, about 15% above Tesla’s Oct. 30 close, by my math.<\/p>\n
“We see a potential merger as additive optionality on top,” wrote Perry.<\/p>\n
Related: Bank of America resets Tesla forecast as Robotaxi miles double<\/p>\n
#TeslaSpaceX #merger #math #shifted #Tesla039s #favor<\/p>\n","protected":false},"excerpt":{"rendered":"
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