On the day of SpaceX\u2019s highly anticipated IPO, President Gwynne Shotwell hinted at a move many analysts increasingly expect\u2014that Elon Musk\u2019s two public companies will someday merge to form a Musk empire.<\/p>\n
In an interview<\/a> with CNBC, she said a mega merger \u201cmight make Elon\u2019s life a little easier, actually.\u201d\u00a0<\/p>\n \u201cThere\u2019s no question that there\u2019s synergies between Tesla<\/a> and SpaceX in our futures, definitely, there\u2019s a convergence of a kind of what we\u2019re all trying to accomplish in the future,\u201d Shotwell added in the interview.<\/p>\n Shotwell didn\u2019t elaborate on the specific synergies that exist between Tesla and SpaceX, but the two companies are already collaborating in some areas, including jointly running Musk\u2019s planned $55 billion \u201cTerafab\u201d facility<\/a>, which will produce chips for robotics and space travel. SpaceX has also previously spent millions on Tesla technology, including $506 million worth of Tesla megapack power cells<\/a> and $103 million of Cybertrucks for SpaceX facilities.<\/p>\n Musk has a history of combining his companies. In 2016, Tesla shelled out $2.6 billion worth of shares<\/a> to acquire SolarCity, a solar energy company run by his cousins Lyndon and Peter Rive in which he had a 22% stake and served as chairman. Later, after buying social media website X, formerly Twitter, he merged it with his AI company xAI in a deal valued at $50 billion. In February, SpaceX acquired xAI and X<\/a>.\u00a0<\/p>\n As SpaceX makes history with its IPO Friday, Shotwell noted that combining Musk\u2019s two public companies may not happen in the near term: \u201cright now I\u2019m focused on keeping the lights on here.\u201d<\/p>\n Still, Shotwell\u2019s comments lend more evidence that a merger between the two companies could come in the future. Some analysts already see the tie-up as inevitable. Wedbush senior equity research analyst Dan Ives claimed in a note<\/a> earlier this week that merging the two companies would be a \u201choly grail\u201d move that would allow Musk to control more of the AI ecosystem.\u00a0<\/p>\n The Tesla bull sees more than an 80% chance they will merge. Part of the reason is that the two companies have already started laying the groundwork for a potential tie-up.<\/p>\n In January, Tesla made a $2 billion investment in xAI. A month later when SpaceX acquired xAI in an all-stock deal valued at $250 billion, Tesla\u2019s $2 billion stake converted to nearly 19 million shares<\/a>, noted Ives.<\/p>\n SpaceX debuted at a starting price of $152<\/a>, and quickly rose to $173, well above the IPO price of $135. Therefore, Tesla\u2019s stake is now worth about $3.29 billion, a roughly 64% paper gain.<\/p>\n \u201cHistoric moment for Musk, the markets, and SpaceX. Watershed event,\u201d Ives added in a comment to Fortune.<\/p>\n Yet, Tesla\u2019s stake could rise in value in the coming days especially as analysts predict that the company\u2019s stock price is set to skyrocket even higher.\u00a0<\/p>\n Timothy Horan at investment bank and financial services firm Oppenheimer has set a price target of $190<\/a>.\u00a0<\/p>\n Merging Tesla and SpaceX may create one the biggest companies in the world. Already, SpaceX\u2019s valuation of more than $2.3 trillion makes it the seventh largest company in the world by market cap and one of only 14 other companies worth more than $1 trillion.\u00a0<\/p>\n Tesla, for its part, is neck-and-neck with Meta<\/a> for the title of 10th largest company in the world, with a market cap of $1.5 trillion.\u00a0<\/p>\n Some quick math shows that a combined SpaceX-Tesla giant could potentially be worth more than $3 trillion, leapfrogging the likes of Amazon<\/a> and Microsoft<\/a> to become the fourth biggest company in the world.<\/p>\n A merger between the two companies is unlikely to face major regulatory hurdles, experts told CNBC, partly because they operate in separate industries. Yet, the complex governance issues\u2014like deciding which company would be the parent, who would determine the price of the new company\u2019s shares, as well as the details of a stock swap\u2014would all need to be tackled.\u00a0<\/p>\n Because of Musk\u2019s 85% voting power at SpaceX, he would not have to worry about pushback from the rocket company\u2019s board. While Musk holds a lower 13% stake in Tesla, a giant pay package approved by shareholders in November would boost his ownership stake in the EV maker to around 25%, if he hits a series of ambitious financial and operational targets over the next decade.<\/p>\n