Tesla, SpaceX Merger Talks Lift TSLA 4%; Shareholders Weigh Dilution Risk

Shares of Tesla (TSLA) rose as much as 4% and SpaceX gained 12% in intraday trading on October 21 after the two companies began merger discussions, a deal markets expect to bolster AI and robotics initiatives. Control is a central concern: Musk holds roughly 80% of SpaceX voting power versus about 20% of Tesla equity, fueling investor worry that terms could favor SpaceX and expand his influence. Because Tesla carries one vote per share, Musk cannot approve the deal alone; he said winning support from holders of a majority of shares is a high bar, though retail investors—estimated at over 25% of the stock and largely loyal to him—could tip the vote alongside some institutions. About 70% of Tesla revenue comes from EVs, where sales remain pressured by the expiration of U.S. subsidies and fierce Chinese price competition. Tesla reports third-quarter results after the close on October 21. SpaceX is capital-intensive and may need further fundraising, raising dilution risk for existing Tesla holders.