Shares of SpaceX jumped and Tesla shares moved higher on Oct. 21 after Elon Musk, CEO of both companies, announced that the two companies have formed committees to study combining the two technology giants into one company.
A combined SpaceX (SPCX) and Tesla (TSLA) would have a market capitalization of at least $3.6 trillion, good enough to make the company the fifth most valuable company in the world after Nvidia (NVDA), Apple (AAPL), Alphabet (GOOGL) and Microsoft (MSFT).
Also read: Elon Musk wants every American kid to own a SpaceX share
That assumes the deal would survive regulatory and political scrutiny. The Trump Administration has close ties to Musk already, but the midterm elections may make the politics of the deal trickier.
SpaceX closed at 7.8% to $159.31. Tesla was up 3.4% to $386.47.
The Wall Street Journal reported in its Oct. 21 editions that Musk ordered SpaceX to slow down a military version of its Starlink mobile telephony networks available to Ukraine. Later in the day, Ukrainian President Volodymyr Zelensky said that U.S. intelligence sharing with Ukraine had been restored, The Washington Post reported.
The move capped the speeds at which Ukrainian hardware could stay connected to the satellite-based network, the report said. That rendered some offensive drones and interceptor drones virtually useless.
A merger of the SpaceX and Tesla has been talked about for some time, but Musk disclosed the two companies’ boards of directors have formed separate committees to study a possible merger. The disclosure came during the question-and-answer section of SpaceX’s third-quarter earnings call on Oct. 21.
Musk, as CEO, can’t be on either board committee for conflict of interest reasons. But that does not preclude either committee talking to him about a deal. But, when questioned about it on the earnings call, he said, “I do think there’s a lot of merit to combining the companies as we are pretty much in the super intelligence singularity.”
SpaceX’s biggest asset is its Starlink business, which is a global satellite system
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