Musk sees merit in Tesla-SpaceX merger; SpaceX shares up 12%, Tesla up over 3%

Elon Musk, who leads both Tesla and SpaceX, said he sees a lot of merit in combining the two firms. He added that special committees must agree and that a deal is not certain, first reported by CNBC-TV18. According to Musk, special committees have been formed to explore a potential merger, first reported by The Economic Times.

Tesla shares rose more than 3% and SpaceX shares rose 12%, CNBC-TV18 reported. Musk holds about 85% of SpaceX voting power and roughly 20% of Tesla's. Estimates of his voting stake after a merger differ. Birmingham put it at about 57%, while Zurrer said 58% at a 0.7 exchange ratio, both as reported by CNBC-TV18. Musk says Tesla's side requires backing from most of its total shares, not merely the ones that vote. Tesla's annual shareholder meeting is on December 3.

Justus Parmar, CEO of Fortuna Investments, said: "I think a Tesla-SpaceX merger makes sense. It’s very strategic because both companies are rapidly transitioning into artificial intelligence and autonomous systems, and both have huge infrastructure projects underway," Josh Gilbert of eToro said: "A deal where one man runs both sides will draw tough questions on governance," Both quotes were first reported by CNBC-TV18. The two firms are jointly developing the Terafab chip plant.

Separately, AI-linked stocks sold off on Oct 22: Meta fell about 7%, Tesla 3.1%, Nvidia 4.4% and the Nasdaq Composite 2.6%, per The Economic Times. Earnings from Microsoft, Alphabet and Amazon are due next week. Wall Street anticipates the deal will come together before the close of next year.