Tesla Stock Falls 2% as SpaceX IPO at $1.77T Sparks Merger Talk Among Wall Street

Tesla shares fell 2% on Wednesday (July 8) to close at $394.06 following SpaceX's record initial public offering, which valued the aerospace company at approximately $1.77 trillion and prompted investors to weigh a potential future combination of the two companies.

According to JPMorgan analyst Rajat Gupta, Tesla and SpaceX possess complementary businesses that could create a unique industrial technology ecosystem spanning electric vehicles, batteries, autonomous driving, robotics, satellite communications and aerospace. However, JPMorgan warned that regulatory, geopolitical and corporate governance challenges make such a deal unlikely in the near term, citing Tesla's significant operations in China and SpaceX's involvement in national security and government contracts.