Tesla Roadster reveal fuels SpaceX merger speculation

Tesla ↗ 4.23% showed its long-delayed next-generation Roadster on Thursday, October 15, and the car's SpaceX-built thrusters added to investor talk that Elon Musk's two largest companies could soon merge. The event was streamed from a SpaceX test site in McGregor, Texas, according to CNBC. On the stream, a prototype drove upside down along a ramp using a suction system, turned in the air and landed with the help of built-in thrusters. Tesla said production will start in 2028, Reuters reported. Tesla shares rose in premarket trading on Friday after the reveal.finance.yahoo.com+2

Investors see a merger signal

Ross Gerber of Gerber Kawasaki posted on X that "spaceX buys tesla this year," saying a deal "has become obvious" after the event. He also called the hovering technology "just for show," Benzinga reported. Earlier, in an interview with Bloomberg, Gerber said an expensive, low-volume car would not make a material difference to Tesla's finances.longbridge.com+1

Dan Ives of Yorkville pointed to the propulsion, pressure-vessel and control hardware on the car. He said the Roadster "puts the Tesla/SpaceX relationship on the table in a tangible way" and "strengthens the case operating as one engineering platform over time," according to Stocktwits.finance.yahoo.com

The reaction followed a note from Barclays analyst Dan Levy published Wednesday. Levy wrote that a merger could be announced before Tesla's annual shareholder meeting, which must be held by December 6. He said SpaceX buying Tesla in an all-stock deal was the more likely structure, Investing.com reported. Barclays estimated Musk would own about 37% of the combined company and hold 56% of its voting power, per Axios. If no deal comes before the meeting, the bank still expects one within six to 12 months. Neither company has confirmed any talks, Investing.com noted.finance.yahoo.com+1

Questions about earnings

Some analysts doubted the car's business case. Gene Munster of Deepwater Asset Management called the demonstration an "engineering flex" with "no commercial value," though he agreed it showed Musk's interest in bringing the companies together, Stocktwits reported. Gary Black of Future Fund ran the numbers on 3,000 Roadsters a year at $100,000 profit each. That would add about $0.06 per share to Tesla's projected 2029 earnings of $5.40 per share. JPMorgan kept its Neutral rating after the event.finance.yahoo.com

The car itself

Tesla's reservation page lists a "Performance" version that requires a $50,000 deposit and a "Thrust" version with acceleration thrusters that requires $250,000, Reuters reported. A third trim, "Rocket," is invite-only and not road-legal. Tesla said the Thrust version reached 0-60 mph in 0.81 seconds in a live test, according to The Drive. The thrusters run on compressed air rather than fuel.ca.finance.yahoo.com+1