TLDR
- Tesla stock closed at $373.71 on Tuesday, up 2%, then rose 2.2% to $382.15 after hours.
- Musk said SpaceX and Tesla each formed independent special committees to look at a merger.
- Any deal would need approval from at least 50% of all outstanding Tesla stock.
- Ark Invest set a $4,400 base-case target for 2031, with a $5,000 bull case and $3,300 bear case.
- RBC outlined a $480 per share SpaceX deal, and Cantor Fitzgerald kept its $485 target.
Tesla (TSLA) stock closed at $373.71 on Tuesday, up $5.65 or 2%. It then climbed in after-hours trading.
The stock rose 2.2% to $382.15 after Elon Musk gave an update on a possible merger with SpaceX. He spoke during SpaceX’s third-quarter earnings call.
SpaceX Merger Talks Get Real
Musk said SpaceX and Tesla have each set up independent special committees. Their job is to evaluate a potential combination.
He called the deal a “good idea” but said no terms are final. Any deal would need approval from at least 50% of all outstanding Tesla stock.
RBC laid out a hypothetical deal where SpaceX buys Tesla in an all-stock transaction at $480 a share. That would value the combined company at $3.74 trillion.
Cantor Fitzgerald repeated its Overweight rating and $485 price target on Tesla. The call came ahead of Wednesday’s earnings report.
Options traders leaned bullish too. The put-to-call ratio on near-term contracts sat at 0.47.
Ark Sets a $4,400 Target
Cathie Wood’s Ark Invest also made headlines with a new long-term note. It set a base-case target of $4,400 on Tesla for 2031.
The bull case is $5,000 and the bear case is $3,300. All three sit far above where the stock trades today.
Ark expects robotaxis to make up about 80% of Tesla’s enterprise value in 2031. That is down from about 90% in 2029 in its 2024 model.
The firm thinks Optimus robot-as-a-service is likely to take off as robotaxis spread. Terafab also features in its assumptions.
Ark said a SpaceX and Tesla merger could happen within five years. It estimates the pair could produce $3.8 trillion in revenue and $2.7 trillion in EBIT by 2031.
SpaceX would account for about 62% of that revenue and 69% of the EBIT. Ark’s own model still treats Tesla as a standalone business.
Last week, Tesla showed off its redesigned Roadster at SpaceX’s test site in McGregor, Texas. The car drove upside down on a curved ramp and flipped in midair, which is one way to get attention.
Musk said it can reach 60 mph in under a second and top 230 mph. Production starts in 2028, with a $50,000 deposit on the Performance version and $250,000 on the Thrust version.
SpaceX’s own results helped the mood. Its stock jumped 8% in after-hours trading following its third-quarter report.
The Nasdaq gained 0.8% and the S&P 500 added 0.3% in Tuesday’s regular session. Tesla reports earnings Wednesday.
