Tesla Closes at $401.69 After Pullback From 4.04% Gain as Potential Merger Explored

Key Facts

Tesla shares closed at $401.69 on October 28, 2026, down from $407.46 in the previous session, as a rally tied to speculation about a merger with SpaceX stalled. The decline came as the two companies considered deepening their relationship, a process that could include combining their businesses, according to Tesla’s filing with the U.S. Securities and Exchange Commission. Tesla said its board had formed a special committee of disinterested directors to explore these options. But the filings do not establish that an agreement exists or that a deal has been approved, and required approvals remain part of any potential transaction.

SpaceX also disclosed that it had formed a special committee and said the committee had made no decision on any potential merger. It added that any transaction would require approval from its committee, its board and its controlling shareholder. The company also cautioned that there was no assurance an agreement would be reached or a transaction completed, and that its committee might not recommend a deal it did not consider in shareholders’ interests. Under Tesla’s filing, any potential transaction would be subject, among other things, to a favorable recommendation from the special committee and shareholder approval where required. Reuters quoted Elon Musk as saying the committees were formed at shareholders’ request and that he was not participating in their discussions because of conflicts of interest.

The ties between the companies extend beyond speculation to existing investments and transactions. Tesla said it invested $2.00 billion in SpaceX common stock in March 2026, representing a stake of less than 1%. Tesla also recorded $221 million in revenue from Megapack product sales to SpaceX in the three months ended September 30, 2026, as part of its ordinary course of business. Over the same period, SpaceX revenue rose 161% to $14.58 billion, according to Reuters. The company’s artificial intelligence revenue jumped to $7.56 billion, nearly ten times its level a year earlier, the same report said.

Musk said cooperation between the companies could enable work on superintelligence software, chip design, robotics and connectivity, alongside the Terafab project. The project is part of the industrial ties he cited when discussing potential cooperation, but it does not set a date for a deal between the companies. Musk said Terafab aims to produce its first test chip in May or June 2027. The project targets reaching volume production in the third quarter of 2028. Those dates provide a timeline for the chip project, while the companies’ filings include no timetable for a potential merger agreement.

The latest wave of interest followed Barclays’ suggestion the previous week that a deal could be announced before Tesla’s annual meeting in December, according to Reuters. Musk called the assumption that a merger was certain an exaggeration, saying some people assume that combining SpaceX and Tesla is a done deal, “and I think that is overstating it.” On the day the committees were announced, SpaceX shares rose 4.6% in after-hours trading and Tesla shares gained 1.2%. On October 21, Tesla shares gained more than 3% and SpaceX shares rose 11%, Reuters reported. Musk said approval from shareholders holding 50% of Tesla’s total shares would be required, not merely a majority of votes cast; the company’s annual meeting in December remains the next corporate date cited in this context.