Tesla and SpaceX take first step towards merger, would dilute all shareholders

Tesla and SpaceX have both formed special committees within their corporate boards to explore the possibility of merging the two companies according to Elon Musk, who is CEO of both companies.

The merger could have big consequences not just for Tesla and SpaceX shareholders, but could dilute the retirement savings of everyone with exposure to major stock indices.

SpaceX held its quarterly earnings call today, just a few months after going public for the first time.

And for us in the electric car world, the big and unsurprising news was that Tesla and SpaceX are now formally reviewing the possibility of merging the companies together.

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The possibility of a merger has been rumored for a long time. Musk has long complained of the need to respond to shareholders’ concerns as CEO of Tesla. It is odd, then, for him to take SpaceX public when he has complained for more than a decade about Tesla being public and having to respond to shareholders.

Musk wants more control

The problem, as Musk sees it, is that he does not have enough control of Tesla. Over the years, his ownership percentage had dwindled as Tesla sold stock in offerings or granted stock to employees, though today after the restoration of his illegal pay package, his ownership percentage runs around 22%.

This means he can’t ram anything through that he wants, he has to build consensus around his ideas. (That said, shareholders have proven themselves happy to oblige any ridiculous idea that he proposes to them…)

But that’s not enough for Musk. He wants total control of the company, and he’ll try any financial shenanigans to get it. He’s gone so far as to market this idea by saying that he needs $1 trillion so he can control a robot army.

If he gets that most recent pay package, a huge chunk of shares will be created out of thin air, going right into the pocket of the one person on the planet who needs them the least, and diluting the voting power and value of every other person’s shares.

A marketing plan gets him there

So, he cooked up a plan. Sell the most ridiculous CEO pay package ever devised to Tesla shareholders, making big claims that the stock will only be delivered if Tesla manages to deliver a million robots, a million robotaxis, and various other operational milestones that would surely indicate Tesla’s success as a company.

Then do the same with SpaceX, promising to put a million colonists on Mars (which will not happen). Make sure to give yourself super-voting shares before SpaceX goes public, so you don’t have to worry about ever listening to anyone else.

Let these high-profile targets grab headlines, and trick shareholders who don’t know any better into voting for these pay packages, thinking they’re safe because even if their shares are diluted by these massive stock grants, they’ll just end up with a slightly smaller piece of a much larger pie. It’s a win-win, right?

Shareholders were tricked with impossible promises

Well… unless we include a provision in the pay package that says the shares are automatically delivered in the case of a merger. That’s right, if SpaceX and Tesla merge, then all the talk about robots and Mars colonies is irrelevant. Musk gets his stock regardless of any operational milestones.

He gets stock, you get diluted, and you didn’t even see a single robot delivered.

And so, after only the second quarterly report ever presented by SpaceX, the companies are already exploring the possibility of merging.

Musk said today during SpaceX’s earnings call that each company has formed a “special committee” of “independent board members” (and those quotes around the word “independent” are doing heavy lifting) which are reviewing the possibility of a merger.

“Independent” boards oddly always side with Musk over shareholders

This does not mean that the merger is a certain thing. First, the “independent” board members need to agree that it’s a good idea – but, given that Tesla’s board has always sought Musk’s interests and not those of the company, it certainly seems that if Musk thinks it’s a good idea, the committee probably will too.

After all, the special committee on pay signed off on Musk’s ridiculous trillion-dollar pay package, despite that all that package did was attach the company to the very anchor that is dragging it down. That package would benefit Musk at the cost of all other shareholders and the company’s own operations, so the board’s independence is called into question if that’s the kind of idea it signs off on.

Musk is not officially allowed to be involved in these discussions, nor are boardmembers not deemed “independent,” like his brother, Kimbal Musk. But Elon has made it clear that he wants this to happen. He did so again today, when he said that he thinks a merger would be a good idea, because “we are pretty much in the superintelligence singularity” (notably, we are not, and neither would that be particularly relevant to an auto manufacturer).

So, a board sign-off seems reasonably certain given what Musk has publicly directed Tesla’s captured board to do. After that, shareholders of both companies need to approve the move.

Will the shareholder vote pass? Tesla laid the groundwork

For SpaceX this is an easy one – Musk controls more than 50% of voting shares, and therefore the company will approve of the merger. He set it up this way, and the merger would give him more money and more control, so he’s going to vote for it.

For Tesla, the vote could theoretically fail to pass. The company would need a vote of 50% of all outstanding shares, not just 50% of shareholders who turn out to cast their votes.

For this reason, Tesla has already prepared a <a href="https://electrek.co/2026/09/29/tesla-sec-retail-auto-vote-board-spacex-merger/" rel=

Source: electrek.co — article syndicated from the publisher’s feed; all rights remain with the original publisher.