Tesla, SpaceX Shares Jump After Musk Confirms Merger Committees; Combined Entity Could Be Worth $3.5 Trillion

Shares of Tesla and SpaceX rose sharply Wednesday after Elon Musk said both companies formed "special committees" to discuss a possible merger that would create a roughly $3.5 trillion entity, combining the world's largest rocket-launch and satellite-internet provider with the second-largest electric-vehicle maker. In early afternoon trading, SpaceX jumped 8% and Tesla gained 3.5%. Musk, who owns 11% of SpaceX with majority voting control and 19% of Tesla, said he cannot interact with the committees and is not privy to their discussions. He cited cooperation on AI chip production at the Terafab factory in Texas, AI for Tesla's humanoid robots and autonomous vehicles, and SpaceX's Starmind orbital data-center project as rationale. A change-in-control provision in Tesla's approved trillion-dollar compensation plan would automatically satisfy many performance targets in certain mergers. Forbes estimated Musk's net worth at $1.004 trillion following Wednesday's gains, up $80 billion. The deal would eclipse Vodafone AirTouch's $354 billion purchase of Mannesmann in today's dollars. Analysts flag steep valuations—SpaceX at 100 times forward earnings, Tesla at 170—and Democrats in Congress could scrutinize federal contracts.