Tesla opened its third-quarter earnings call by declining to discuss a possible SpaceX merger, and shares fell in premarket trading. Analysts at JPMorgan, CFRA and Barclays still weigh what a combination could mean for the stock.
Tesla investors wanted news on a SpaceX merger and got none. Travis Axelrod, Tesla's head of investor relations, opened the third-quarter earnings call by telling analysts, according to MarketWatch: "We will not be addressing any questions today on a potential merger with SpaceX."
Shares slide on the lack of fresh information
Tesla shares fell 5% in Thursday's premarket trading on the lack of fresh information. Merger talk is now a hotter topic than even robotaxis or spending, the report says.
Musk, who leads both companies as CEO, warned SpaceX investors on Tuesday that talks between the two boards are early and a combination isn't certain. Tesla has a roughly $1.48 trillion market capitalization, while SpaceX is worth about $2 trillion.
JPMorgan, CFRA and Barclays weigh a deal
JPMorgan analysts, led by Rajat Gupta, say merger chatter is likely to continue to bring the stock's price down. They also see some comfort for long-term investors in rising full self-driving adoption, stronger robotaxi mileage and a larger Tesla fleet with the launch of FSD V15.
CFRA analyst Garrett Nelson says investor sentiment has shifted from concerns about cash burn tied to a major capex cycle to questions about the merger. He sees the merger as a near certainty, likely happening by the end of 2027.
Barclays analyst Dan Levy thinks a merger would help the two companies accelerate their work on the Terafab chip plant and give Musk greater control.
Terafab and a lower sales target
Tesla told investors Wednesday it plans to begin commissioning equipment in 2027 for a planned Terafab facility in Austin, Texas. Musk also said Tesla would aim to sell 5 million units a year by 2030, well below the earlier projection of 20 million a year set out in 2020.
A Morgan Stanley team led by Andrew Percoco wrote that Tesla's results reinforce its view that the company is making progress toward commercializing autonomy and robotics.
Source: MarketWatch
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