Elon Musk announced on Thursday that merging SpaceX and Tesla could be a good idea, and both companies have formed special committees to examine this matter. He made these statements during a conference call with investors.
Details of the Special Committees
Musk said: "I think this is a good idea, but it really depends on the special committees of both companies." He also explained that due to conflicts of interest, he cannot participate in the discussions of these committees, which include independent directors.
After these statements, SpaceX's stock rose by 8% and Tesla's stock increased by 1.8%. SpaceX has recently reported its first profit as a public company.
Financial Expectations and Future
Musk predicted that the annual recurring revenue of these companies could reach between $500 billion and $1 trillion by the end of 2027, given the increasing demand for space data and the boom in artificial intelligence.
This is not the first time Musk has talked about merging these two companies. Rumors about this merger have recently gained traction with Barclays suggesting that the agreement might be unveiled before Tesla's annual meeting in December.
Musk told investors that the special committees were formed at the request of shareholders, and at least 50% of Tesla's shareholders must agree for this deal to proceed.
He also said: "I think merging these two companies has many advantages, as we are almost on the verge of the emergence of superintelligence, and collaboration in developing superintelligent software, chip design, robotics, etc., could be very beneficial." However, he warned that it is still early to assume that this merger will happen.
Gene Munster, managing partner at Deepwater Asset Management, said: "Right now, I think there is a 95% chance that something will happen next year. Clearly, this matter is progressing within the company, and I think it will eventually happen."
Justus Parmar, CEO of Fortuna Investment, said that this merger could provide more benefits for investors and help Tesla use its cash flow to support SpaceX.
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