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Key Takeaways
- Elon Musk said on SpaceX’s Oct. 20 earnings call that a SpaceX-Tesla merger would need the votes of 50% of all Tesla shares, and that the two companies’ special committees haven’t agreed on terms.
- JPMorgan expects a SpaceX-led all-stock deal at a typical 30% to 35% premium, which works out to about $486 to $505 a share on Tesla’s $373.71 close.
- If turnout matches the roughly 74% at Tesla’s 2025 annual meeting, a deal would need about two-thirds of the votes cast.
- Tesla’s new auto-vote program for retail holders could narrow that gap, but it’s brand new and no enrollment figures are public.
A lot of Tesla (TSLA) investors treat a merger with SpaceX (SPCX) as a done deal. Elon Musk isn’t one of them.
Deutsche Bank’s Edison Yu asked about a merger on SpaceX’s earnings call Tuesday. Musk started with: “I feel like I’m tap dancing through a mine field.”
Musk said both companies have set up special committees of independent directors, and he stays out of their talks as a conflicted party. He thinks a deal would be a good idea. Then he named the problem:
“particularly on the Tesla side, we will need a 50% vote of all shares, not just those who vote, but of all shareholders. And that’s quite a high hurdle to try to achieve.”
Wall Street has mostly skipped over that part.
JPMorgan expects a SpaceX-led all-stock deal at a typical 30% to 35% premium to Tesla’s current valuation, a structure that would keep Musk in majority voting control of the combined company. On Tesla’s $373.71 close Tuesday, that’s about $486 to $505 a share.
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Every missing ballot counts as a no
Tesla needs a majority of all its shares, so any share that doesn’t vote works against the deal.
And plenty of Tesla shares don’t vote. Turnout at its 2025 annual meeting was about 74%, one of its best rates yet. At that turnout, a merger would need about 68% of the votes cast just to reach half of all shares.
Tesla has already seen how this plays out. In 2025, its proposal to drop its supermajority voting rules won about 54% of the shares that voted. That came to only 39.4% of all shares.
Barclays put broker non-votes at about 11% of Tesla’s outstanding votes at that meeting. In its request to the SEC, Tesla cited Broadridge data showing that retail investors voted only 28% of their shares in the 2025 proxy season, against 76.6% for institutions. And few stocks have a retail following like Tesla’s.
JPMorgan’s range sits well above the Street
Over the past year, analysts’ mean price target has stayed between about $365 and $426.
…and it’s $397.83 today. JPMorgan’s range is roughly 22% to 27% above that, and close to Tesla’s highest close of the past year, $489.88 on Dec. 16, 2025. It’s also well above the $420 a share Gary Black predicted SpaceX would pay.
Tesla isn’t cheap going in, either. It trades at 191.6x forward earnings. Its five-year average is 107.7x.
A 30% to 35% premium would push that multiple to about 250x, above Tesla’s own five-year peak of 243.1x in December 2025.
Nobody has offered that premium yet. JPMorgan is describing a typical range. Musk said the committees “have not reached agreement on the terms of any transaction,” and that “there’s no guarantee that they will.” It would also be paid in SpaceX stock, so what it’s worth depends on where SpaceX trades when a deal closes.
The auto-vote could change the math
Tesla does have a tool built for exactly this problem. In late September, the SEC cleared a plan that lets Tesla’s retail holders sign up once and have their shares voted automatically the way the board recommends. Those votes are cast as soon as Tesla files its final proxy, and holders can still override them or opt out.
If enough holders sign up, a lot of shares that never vote could become yes votes. But holders pick one of two settings, and one of them leaves out mergers. The program is also brand new, so nobody knows how many Tesla holders will enroll before a vote.
The vote is the bigger hurdle
So JPMorgan’s math does get Tesla near $500, but two things have to happen first. The committees have to agree on terms, and holders of more than half of all Tesla shares have to vote yes.
My take: the vote is the harder of the two, and I wouldn’t pay up for Tesla today betting on a takeout premium. I’d treat $500 as the best case and own the stock for the business it runs now.
Of course, a lot could change soon. Tesla reports third-quarter results after the close on Wednesday, Oct. 21. Analysts expect normalized EPS of $0.45, down from $0.50 a year ago. Any update on the committees, or on how many holders have signed up to auto-vote, would shift the odds quickly.
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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!
