Analysis
SpaceX and Tesla are advancing merger talks, and a deal could be announced as soon as December, Bloomberg reported on Thursday, November 12, according to a Reuters write-up of that report, which added that the companies have also discussed an announcement slipping into early 2027. On Saturday, November 14, Bloomberg set out the index angle: based on Friday's prices, the two companies have a combined market value of nearly $3.5 trillion (about $3.5T), which Bloomberg said would make a merged firm the fifth-largest in the S&P 500.
That is what changed since Pulse last covered the merger review. In October the idea was a set of special committees. Now there is a reported date range, a reported structure and a concrete reason to move quickly: an S&P 500 seat SpaceX cannot win on its own yet. Neither company had announced a deal or terms as of November 14, and neither commented to Reuters or Bloomberg.
How the SpaceX Tesla merger would work
The deal is shaping up as "SpaceX absorbing Tesla, not the other way around," Electrek wrote on November 12, summarizing Bloomberg. The talks center on price and control, with one open variable being how many SpaceX shares Tesla investors would receive. Electrek, which put Tesla at around $1.5 trillion that day, illustrated the scale: a deal valuing Tesla at $2 trillion would carry about a 33% premium on that basis.
“That is what changed since Pulse last covered the merger review.”
Musk called a merger "a good idea" on SpaceX's third-quarter earnings call last month, and confirmed that each company had formed a special committee of independent directors to discuss a combination, per Reuters. Bloomberg reported that Musk endorsed the merger and asked board members to consider it.
How much are SpaceX and Tesla worth?
At the November 12 close, SpaceX's market cap was about $1.90 trillion and Tesla's about $1.55 trillion, Reuters reported. Bloomberg's November 14 piece adds the operating picture:
- SpaceX -- peak trading value of as much as $2.6 trillion soon after its June IPO, in Bloomberg's account; $32 billion of revenue in the 12 months through September; its first quarter of positive earnings reported last month (Bloomberg)
- Tesla -- down 13% this year and trading at more than 180 times expected earnings, against about 18 for the S&P 500 (Bloomberg)
Value Add VC data
- Feb 2026, xAI merger -- SpaceX's purchase of xAI for roughly $250 billion, per Electrek
- Jun 2026, IPO -- trading value peaked at as much as $2.6 trillion soon after listing (a market value, not the IPO price), per Bloomberg
- Nov 2026, Tesla talks -- about $1.90 trillion SpaceX market cap at the November 12 close, below that post-IPO peak, per Reuters
For comparison, the record Electrek cites is Vodafone's $183 billion takeover of Mannesmann in 2000. Any SpaceX-Tesla deal priced near Tesla's $1.55 trillion market cap would be several times that size. Our SpaceX IPO tracker has the listing history.
Why the S&P 500 matters here
S&P Dow Jones Indices declined to change its rules for megacap IPOs, Bloomberg reported, so a stock still has to trade for at least a year and be profitable across the previous four quarters combined. Based on analyst estimates, SpaceX could meet the profit test by the middle of next year. Tesla already holds a seat. Analysts quoted by Bloomberg argue that a combined company should keep Tesla's slot even if Tesla is the one acquired, to preserve continuity and limit turnover. That outcome is not guaranteed: S&P has not commented, and its committee could treat the merged company as a new member.
The money at stake is large. Passive index funds hold about $16 trillion, and TD Securities' Reid Noch estimates that adding the company could draw about $100 billion of demand from index funds, per Bloomberg. If the merged company is not added, passive funds that receive SpaceX shares in exchange for their Tesla stock would have to sell them.
The risks in a SpaceX-Tesla deal
The main obstacle Bloomberg identified is how to ring-fence Tesla's China business, given SpaceX's US defense and government work. A JPMorgan analyst called those "key dynamics that are at odds with each other," per Electrek, which notes that Giga Shanghai builds more than half of Tesla's cars and shipped 67,829 vehicles in October. Concentration is the other concern. "You're becoming more concentrated and that concentration brings risk," VettaFi's Brent Leadbetter told Bloomberg. Tesla shareholders meet on December 3, and the ballot Electrek describes holds no merger vote, so the first formal test would come only after terms are announced.