Key Takeaways
- Elon Musk says combining SpaceX and Tesla has “a lot of merit,” and both boards have formed special committees to look at a merger.
- In a stock deal like this, SpaceX shareholders would carry the risk, and Jim Chanos argues they’d be paying $1.5 trillion for a business with a 5% return on invested capital.
- Tesla’s third-quarter operating income fell 56% from a year earlier, while the stock traded at 185x forward earnings, well above its 5-year average of 108x.
- Even ARK Invest’s model says SpaceX holders gain less from a merger the longer they hold, so the price the special committees agree on matters most.
SpaceX (SPCX) shareholders just got a pointed question from famed short seller Jim Chanos.
Elon Musk said on SpaceX’s third-quarter call that he sees “a lot of merit to combining the companies as we are pretty much in the super intelligence singularity,” and SpaceX and Tesla (TSLA) have each formed a special committee to weigh a merger.
Chanos’s response, on X? “$SPCX Shareholders, you sure you want to buy this 5% ROIC business for $1.5T…?!”
It’s the right question. In this deal, SpaceX’s shareholders are the ones taking the risk.
So far, most of the merger talk has been about Tesla’s side. Gary Black has predicted SpaceX buys Tesla for $420 a share and argued that a combination won’t add much value. Chanos looks at it from the other side: SpaceX would pay with its own stock, so its holders are the buyers. And they have plenty to give up, since SpaceX’s third-quarter revenue and profit both beat Wall Street’s estimates.
TIKR tracks 38 analysts on SpaceX. How many say “Buy”?
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Tesla’s returns are heading the wrong way
Tesla’s own quarter didn’t help. In its third-quarter update, revenue was flat at $28.05 billion, and operating income fell 56% from a year earlier to $0.7 billion, a 2.6% operating margin. Tesla blames higher operating expenses for its super intelligence and other R&D projects and stock-based pay, along with fewer regulatory credits and lower energy profits. The stock is down [5%] this morning.
Here’s the decline Chanos is pointing to…
One X user argued that “5% roic is what the buildout phase looks like before the revenue lands,” pointing to Amazon’s decade of single-digit returns. Chanos shot back: “Who is spending $40B per quarter? Not $TSLA. This declining ROIC is from their existing businesses, including FSD.”
He’s right about the spending. According to its latest quarterly report, Tesla now expects capital expenditures of more than $20 billion in 2026, down from the more than $25 billion it expected three months ago. That’s roughly $5 billion a quarter, an eighth of $40 billion.
The price already assumes the robots work
Tesla’s bulls value the company on robotaxis and Optimus, and its multiple shows it. As of Wednesday’s close, Tesla traded at 185x forward earnings, against a 5-year average of 108x. Its peak was 243x last December.
That’s the problem for SpaceX holders. At that multiple, they’d be paying up front for a robot and robotaxi business Tesla is still building. Meanwhile, the businesses it already runs are earning less on the capital they use.
Even ARK says SpaceX should bargain hard
ARK Invest’s Brett Winton ran the numbers. Compared with no merger, and even at today’s share price ratio, he wrote that “Tesla shareholders would be ~1.6x better off in 2031 while SpaceX shareholders would be ~2x better off.”
When he pushes it out to 2036, he has Tesla holders about 5x better off, against 1.3x for SpaceX holders. In his words: “On longer time horizons SpaceX shareholders should be asking for a discount.”
Musk’s reply: “Interesting.”
SpaceX holders should want that discount
So should SpaceX shareholders be sure they want to buy this? At today’s prices, I don’t think so. Tesla’s return on capital is falling in the businesses it already has, and its 2026 spending plan just got smaller. On top of that, its stock trades at 185x forward earnings for a future that hasn’t arrived. Even ARK’s model says SpaceX’s gain from a deal shrinks over time.
My take: if I held SpaceX, I’d want the special committee to push for a discount on Tesla. Paying a premium would mean SpaceX holders fund Tesla’s robot bet with their own stock.
Of course, the committees haven’t set any terms yet. And if Optimus and robotaxis scale the way Musk expects, a 5% return will be a footnote in a few years.
So what is SpaceX stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what SpaceX could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
