SpaceX Revenue Jumps 161% to $14.6 Billion as Tesla Merger Review Begins
Key Facts
SpaceX disclosed that it had formed a special committee to evaluate a possible combination with Tesla, while Tesla’s board formed an independent committee to study deepening the relationship between the two companies, according to their quarterly filings with the U.S. Securities and Exchange Commission. The SpaceX committee has made no decision, with the company saying that “no decision has been made regarding a potential combination.” Options being considered by Tesla’s committee include commercial arrangements or a merger, with any transaction requiring a favorable recommendation from the committee and the necessary shareholder approval. Elon Musk said describing a merger as certain was “an exaggeration,” a statement reflecting that the committees’ formation does not settle the transaction’s fate. The review comes as SpaceX delivers strong revenue growth, while shareholders face questions about financial consideration and governance if the talks advance to an agreement.
Reuters reported that the parties had hired advisers and that discussions remained at an early stage, covering alternatives such as SpaceX acquiring Tesla or combining the companies under a new holding company, with an all-stock deal under consideration. The companies have announced neither a price nor an exchange ratio, while analysts’ estimates of a potential premium for Tesla shareholders ranged from no premium to 35%. RBC and JPMorgan analysts said investors might seek a premium of between 20% and 35%; these are market estimates, not agreed terms. The issue carries weight given the Associated Press’s estimate that the companies’ combined market value is about $3.5 trillion, and that a deal of this size would likely surpass the previous record of $354 billion in current value. The companies’ size and investor interest do not determine the deal structure, which remains under discussion.
Governance is central to the review. Musk said he is conflicted and cannot participate in committee discussions, while advisers are consulting his lawyers to ensure he recuses himself from merger talks, Reuters reported. Musk has interests in both companies, putting the question of how Tesla shareholders are represented under scrutiny if negotiations advance. Reuters recalled Tesla’s 2016 acquisition of SolarCity, which was followed by years of litigation over Musk’s role. The dispute ended with a $60 million settlement of claims against Tesla directors, although courts upheld the acquisition’s fairness. This history adds particular weight to the independence of the committees and the documentation of their decisions in any new deal.
The companies’ activities are already linked through the Terafab chipmaking project, which aims to reach volume production in the third quarter of 2028, according to Musk, as reported by Reuters. Artificial intelligence also became SpaceX’s largest business by revenue in the third quarter, while its Starlink satellite internet system remained its biggest source of profit, according to the Associated Press. SpaceX revenue reached $14.6 billion in the quarter ended September 2026, up 161% from $5.6 billion in the same period of 2025. The company posted net income of $4.4 billion, compared with a net loss of $1.1 billion a year earlier. Reuters said AI accounts for more than half of SpaceX revenue, and that an additional $35 billion to $40 billion in spending is likely in the fourth quarter to fund expansion; this is expected spending, not an amount already incurred.
Tesla disclosed revenue of $221 million from sales of Megapack products to SpaceX in the third quarter of 2026, and $626 million during the nine months ended in September. Tesla also invested $2 billion in SpaceX shares in March 2026, representing a stake of less than 1%. Receivables due from SpaceX to Tesla stood at $729 million on September 30, while deferred revenue for unfulfilled Megapack contracts reached $648 million. These figures show the existing commercial and financial ties ahead of any potential merger, while Tesla’s committee remains tasked with examining broader options, including commercial arrangements or combining the companies. These ties make independent evaluation of any deal’s terms more important.
In the market, Tesla shares rose more than 3% and SpaceX shares gained 11% on Wednesday, October 21, Reuters reported, adding that the increase would have added about $210 billion to SpaceX’s market value if it had held. In after-hours trading on October 20, SpaceX shares rose 7.5% after the announcement of its quarterly results, according to the Associated Press. The after-hours gains should not be confused with Wednesday’s session move, as the figures refer to different trading periods. Tesla shares closed at 399.81 on October 30, according to EL7 data, which did not specify the price unit. Tesla plans to hold its annual shareholder meeting on December 3, 2026, while Reuters said analysts are watching for regulatory disclosures about the discussions ahead of the meeting.