Commentary on Elon Musk's Desire to Merge Tesla and SpaceX Suggests He Wants to Avoid Eight Earnings Calls a Year
Commentary: The merger is to reduce the number of earnings calls.
Some commentators suggest that Elon Musk's main reason for wanting to merge Tesla and SpaceX is that he does not want to hold eight earnings calls a year. This is an inference from outsiders, not a reason given by Musk himself.
Both companies are publicly listed and have quarterly earnings calls, totaling eight. SpaceX President Gwynne Shotwell said on CNBC on the day of the listing in June that a merger might make Musk's life a bit easier. She did not limit the reason to earnings calls.
At the Tesla earnings call on July 22, Musk was asked by a Wells Fargo analyst about the merger and replied that he could not discuss it during the earnings call and must follow proper procedures. On September 15, at the All-In event, he sat next to Shotwell and said that with so many layers of cooperation, who could imagine what actions might be taken. There is no board approval, no terms, and no completion date.
What exists are contracts, not a merger. Tesla's general counsel stated that there are multiple mutually beneficial transactions between the two parties, deepening their relationship through an investment and a framework agreement. Tesla's CFO mentioned in the July meeting that about $1 billion of net profit comes from the market value gains of its SpaceX shares. One report listed the market values of the two companies as approximately $1.47 trillion and $1.21 trillion, respectively.
Cathie Wood predicts that the two will merge and that an announcement could come by the end of the year. She also sees China as an obstacle: SpaceX has U.S. national security contracts, while Tesla wants to do business in China. The market previously estimated a 20% probability of an announcement by 2026.
If a buyer occurs, it would involve exchanging shares of one listed company for control of another; the seller would need to follow formal procedures with two boards of directors. The situation is still driven by implications, not a transaction. Funding remains in cross-shareholdings and framework agreements, benefiting from having one less set of disclosed controlling parties, while putting pressure on investors who expect separate pricing for cars and rockets from eight earnings calls.
Source: Public Information
ABAB AI Insight
Elon Musk simultaneously controls Tesla and SpaceX, and the disclosure obligations after going public are calculated by company, not by controller. SpaceX completed its listing in June, and Shotwell suggested that a merger could make him more relaxed. In July, he refused to discuss the merger at the Tesla earnings call, effectively acknowledging the topic's existence but moving the discussion from the earnings call to formal procedures. The eight earnings calls are an arithmetic calculation of four for each company, not a transaction document.
The capital path has already taken the route of cross-shareholding. Tesla holds shares in SpaceX, and about $1 billion of net profit in July came from market value gains, not from car sales. The general counsel stated that there are multiple transactions under the framework agreement, and xAI has already integrated into SpaceX's AI business. If a merger occurs, it would consolidate these related transactions into one report rather than starting cooperation from scratch.
A comparable case is Musk's merger of SolarCity into Tesla, which ended two sets of disclosures with one shareholder vote. The current position is not a signing period. There are no terms, no completion date, and Wood's year-end prediction aligns with a roughly 20% probability of an announcement. China presents a structural obstacle: rocket contracts and the Chinese automotive market cannot automatically be included in the same prospectus.
Structurally, this is capital concentration. Pricing power is currently split between automotive quarterly reports and rocket quarterly reports; a merger would consolidate it under one controlling party. Fewer earnings calls would be a result, not a consideration. If formal procedures are completed, investors would lose the opportunity to price separately for the two companies; if it only remains an implication, the eight earnings calls would still occur, and the market value gains from cross-shareholding would continue to appear in Tesla's net profit.
ABAB News · Cognitive Law
Both companies are public; earnings calls are counted by company, not by person.
Things that cannot be discussed at earnings calls are already procedural issues.
Cross-shareholding exists; a merger may not yet have terms.