Billionaire investor Chamath Palihapitiya said overnight late Tuesday there was 'very obvious industrial logic' in combining Tesla, Inc. (TSLA) with Elon Musk's SpaceX, sending Tesla stocks up 0.4% to $396.18. Palihapitiya, an early SpaceX investor dubbed the 'SPAC King,' told CNBC that consolidating the two companies under one capital structure would enable unified fundraising for Musk's ventures. The remarks reiterate his March prediction that SpaceX would reverse-merge into Tesla rather than pursue a traditional IPO, consolidating Musk's 'two seminal assets into one cap table.'
Palihapitiya Outlines Consolidation Benefits for Tesla and SpaceX
Speaking in a CNBC interview, Palihapitiya said there is 'a very obvious industrial logic to put these two businesses together, to have one capital structure, to have one balance sheet, to be able to raise money for the broad swath of things that he's doing as one vehicle.' Palihapitiya, who invested in SpaceX through Peter Thiel's Founders Fund and was an investor in satellite communications company Swarm before its acquisition by SpaceX, called the aerospace company 'an incredible company' and 'the outlier of outliers.'
Palihapitiya highlighted SpaceX's direct-to-cell business as a growth driver: 'I think that you're going to see an enormous business in the domestic cellular market before you see a lot of other revenue streams hit,' he said.
Jefferies and JPMorgan Assess Merger Feasibility
Jefferies said a merger carries strategic logic, estimating that a nil-premium deal could leave Elon Musk with 55.3% voting control while still allowing room for a premium to Tesla shareholders. JPMorgan called the idea 'strategically coherent on paper,' citing potential links across AI, robotics, energy, transportation and space, while flagging governance and execution risks.
Jefferies raised its TSLA price target to $400 from $375 and maintained a 'Hold' rating after Tesla delivered 480,100 vehicles in the quarter, well above estimates. The firm said stronger demand in China and Europe suggested Tesla's prolonged growth and earnings slowdown may be reversing. It also raised its second-quarter earnings before interest and taxes (EBIT) forecast to $1.45 billion, though it remained cautious about potential delays in the Cybercab ramp.
Tesla Reports Q2 Deliveries Ahead of July 22 Earnings
Tesla delivered 480,100 vehicles in the second quarter, exceeding Wall Street estimates. The company's second-quarter earnings are scheduled for July 22, with analysts expecting earnings per share (EPS) of $0.32 and revenue of $26.02 billion. Tesla's stock has declined approximately 12% year-to-date, making it the second-worst performer among the 'Magnificent Seven' technology stocks.
FAQ
What did Chamath Palihapitiya say about a Tesla-SpaceX merger?
Chamath Palihapitiya said overnight late Tuesday there was 'very obvious industrial logic' in combining Tesla and SpaceX under one capital structure to enable unified fundraising. He reiterated his March prediction that SpaceX would reverse-merge into Tesla rather than pursue a traditional IPO.
When is Tesla's second-quarter earnings report scheduled?
Tesla's second-quarter earnings report is scheduled for July 22. Wall Street analysts expect earnings per share (EPS) of $0.32 and revenue of $26.02 billion.
