Tesla-SpaceX Merger Faces High Hurdles, Analyst Says; Deal Would Require Roughly $480 Per Share

A potential merger between SpaceX and Tesla would not be easy to execute and would likely require SpaceX to acquire Tesla in an all-stock deal at a steep premium, RBC Capital Markets chief equity analyst Tom Narayan said, with Tesla shares needing to reach about $480 — his price target — to get a deal done. CEO Elon Musk currently holds 85% of SpaceX's voting power and 20% of Tesla's. Speculation over a combination has grown because of potential synergies between SpaceX's work in artificial intelligence, satellites and data centers and Tesla's Robotaxi and humanoid robot programs. Narayan said the long-term focus could be Terafab, Musk's semiconductor initiative aimed at bringing chip manufacturing in-house and cutting production costs by as much as 90%. "This is how they bypass Nvidia (NVDA) and TSMC (2330.TW)(TSM)," he said. Tesla closed Monday slightly above $368, down about 18% year to date. SpaceX, which went public in June at $135 per share and opened at $150, rose 1.3% Monday to close at $147.96.