Tesla-SpaceX merger a 'good idea': Elon Musk

Elon Musk said Tuesday, Oct. 20, that merging Tesla and SpaceX would be “a good idea,” and confirmed that the boards of both companies have formed special committees to discuss a tie-up.

He spoke on SpaceX’s third-quarter earnings call.

The committees were formed at shareholders’ request and consist of independent directors.

Musk said that as a conflicted party, he can’t take part in their discussions. Reuters called the remarks the first official confirmation that the companies were formally talking.

Musk pushed back on assumptions that a merger is inevitable, saying that would be overstating it, and said the committees have not reached agreement on the terms of any transaction.

On the Tesla side, he said a deal would need approval from 50% of all shares, not just those voting.

SpaceX shares climbed about 5% in extended trading after the company reported 161% revenue growth for the quarter, beating Wall Street estimates.

Reuters says the company also posted its first profit as a public company.

SpaceX revenue surged 161% to $14.58 billion in Q3 on Starlink and superintelligence growth. Tesla is expected to report Q3 financials on Wednesday.

Barclays has suggested a deal could be announced before Tesla’s annual meeting in December.