A Tesla (TSLA) Roadster that jumps over other cars on rocket thrusters has revived the biggest question hanging over Elon Musk's business empire. Are Tesla and SpaceX (SPCX) headed for a merger?
“Shark Tank” investor Kevin O'Leary thinks the answer is already obvious. In an Oct. 17 video on X, the O'Leary Ventures chairman talked through the Roadster prototype and its SpaceX thrusters. He said flying cars face real hurdles in dense cities, but the technology will keep advancing.
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“I think there's no question that Tesla's going to merge with SpaceX because that technology is coming together like this,” O'Leary said. “So if you own Tesla stock, you're going to own New Co. If you already own SpaceX, hang in. You're going to own Tesla. It's going to happen that way.”
A Roadster With Rocket Fuel
O'Leary's comments came two days after Tesla revealed its next-generation Roadster at a SpaceX rocket development facility in McGregor, Texas. The prototype used SpaceX-developed cold-gas thrusters to jump over other Tesla vehicles, spin in midair, and land.
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Musk, CEO of both companies, said the demo came from a collaboration between “the world's best car company and the world's best rocket company.”
The event added fuel to long-running merger talk. Analysts and investors have pointed to shared work on chips, AI, and robotics as evidence the companies are already tightly linked.
Signal, Noise, and a Very Focused Boss
In a separate post the same day, O'Leary wrote about Musk himself. “When I look at Elon Musk, I see almost 100% signal and no noise. He spends his waking hours focused on what matters, and the results speak for themselves. That kind of intensity can come with social tradeoffs, but history's great achievers share a remarkable ability to stay focused on their mission.”
The merger comment was O'Leary's own speculation, based on the overlap between rocketry and automotive technology.
Musk Says the Idea Has Merit, but the Hurdles Are High
Musk addressed the idea more directly on SpaceX's third-quarter earnings call on Oct. 20. He said both companies have formed special committees of independent directors, at the request of shareholders, to review a possible merger. He said he is recused as a conflicted party and can't take part in the discussions.
Musk said a combination would be “a good idea” and that there is “a lot of merit to combining the companies.” He pointed to possible gains in superintelligence software, chip design, the Terafab project, robotics, orbital data centers, and connectivity.
He also said the committees haven't agreed on terms and there is no guarantee they will. Any deal would need shareholder approval, including a vote of 50% of all Tesla shares, which he called a high hurdle.
For Tesla shareholders, O'Leary's framing is simple. Keep the stock, and you'd hold a piece of the combined company if a deal gets done. The same logic runs in reverse for SpaceX holders. Whether the committees ever produce a proposal, and whether shareholders approve it, is still an open question. O'Leary says it's no question. Musk says it's a good idea that's far from done.
On the date of publication, Caleb Naysmith did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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