What merging Tesla and SpaceX could mean for Elon Musk’s fortune
Both Tesla and SpaceX are exploring a potential merger that could create a huge tech giant worth approximately $3.5 trillion.
This comes after SpaceX’s earnings call yesterday (October 20), where Elon Musk revealed that both of his companies have now formed committees to examine the possibility of a merger.
While an agreement has not yet been made - and the merger is not guaranteed to go ahead - a potential merger could result in the firms combining their tech with electric cars, rockets, AI, robotics and satellite internet.
On the call, the Tesla boss said: “Do I think it would be a good idea? Yes, but at the end of the day, the shareholders have to be supportive of this, and particularly on the Tesla side, we will need a 50% vote of all shares, not just those who vote, but of all shareholders.”
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Motivations behind the idea could be rooted in Musk’s AI ambitions, with Tesla having been working on further developing their autonomous driving technology and robotics, while SpaceX is expanding its AI and computing infrastructure.
Would the merger make Elon Musk richer?
The proposed merger could be set to benefit Musk’s wallet, not just from the companies joining forces but how the market values the new business.
The tech mogul’s wealth is largely tied to his ownership stakes in his businesses, meaning an increase in the value of the combined company’s shares could significantly boost his net worth without him having to sell any of his holdings.
Assuming he retains a 33% stake in the firms, Musk could be set to become worth a whopping $1.55 trillion if things go to plan.
However, there is always the potential that things could backfire and if investors decide that the merger makes the business too complicated, this could lead to questions on whether Tesla shareholders are getting a fair deal in exchange for their shares.
According to Forbes, the entrepreneur’s net worth is currently set at $925 billion, making him the richest man in the world.
Although, this isn’t the richest Musk has ever been as earlier this year he set a world record by becoming the planet’s first ever trillionaire.
This was only a brief title, however, as Musk’s net worth soon dropped back down below the trillion mark. We’ll have to wait and see if this merger will be the factor to boost it back into 13 digits.