Tesla holders face SpaceX merger review after 161% revenue gain

Elon Musk said on SpaceX's Tuesday, Oct. 20, earnings call that special shareholder committees at SpaceX and Tesla are weighing a merger after SpaceX reported $14.6 billion in third-quarter revenue.

The process matters because Musk leads both companies and any deal would put valuation and governance before shareholders after SpaceX's revenue rose 161% from a year earlier, topping FactSet's $12.9 billion estimate by $1.7 billion.

SpaceX shares rose nearly 5% in late trading Tuesday after the company issued results above Wall Street forecasts. Tesla shares rose a little over 1%.

Asked about the possible combination, Musk said, “this is definitely kind of a question where I feel like I’m tap dancing through a minefield… but I do think there’s a lot of merit to combining the companies.”

Musk said he is a “conflicted party” and cannot take part in the discussions, leaving the matter to shareholders. Special committees are commonly used in transactions where insiders have interests on both sides, giving independent representatives a forum to assess terms before any recommendation or vote.

SpaceX said third-quarter net income was $4.4 billion, compared with the $1.57 billion expected by analysts surveyed by FactSet. The company also reported earnings per share of 35 cents, above the 14 cents analysts had forecast.

The quarter marked a move back to profit after two consecutive quarterly losses this year, according to the company. SpaceX said growth was driven by its “Super Intelligence” segment and Starlink, its satellite-internet business.

Musk had avoided taking a public position on a combination after SpaceX's July initial public offering. At that time, he said discussion of any merger would need to follow the appropriate process.

The possible transaction faces scrutiny beyond valuation. CNN reported that Tesla shareholders have historically supported Musk's wishes, but the overlapping leadership of the two companies makes the committee process central to how any proposal would be judged.

SpaceX is also under pressure over Starlink and Starshield, a military-grade service related to Starlink. CNN said it could not immediately verify a Wall Street Journal report, based on unnamed people familiar with the matter, that Musk ordered a slowdown of the military-grade system used by Ukraine.

Ukraine last week accused SpaceX of sharply limiting Starlink service in a way that hindered its defense, according to CNN. On X, Musk said Starshield was “owned and controlled by the US government” and that “any limits on speed or usage are decided by the US military and ultimately POTUS.” The Trump administration denied responsibility, CNN reported.

SpaceX did not immediately respond to CNN's request for comment on the Ukraine-related report.