{"text":[[{"start":6.3,"text":"After the biggest initial public offering in history, why not the biggest acquisition? Since SpaceX went public at the end of last week, Wall Street has been simmering with the idea that a union with Tesla, long seen as likely, will be the next step. But if a deal is indeed on the cards, it probably will not be for the reasons usually given."}],[{"start":26.900000000000002,"text":"The potential combination is generally viewed as an inevitable industrial convergence of Elon Musk’s various business interests, with AI as the glue holding it all together. But if that is a reason for combining space rockets, electric vehicles, humanoid robots and a social network under a single roof, almost any collection of assets might seem to belong in a new age industrial conglomerate."}],[{"start":48.35,"text":"In the companies that together make up the Muskverse, meanwhile, there has always been an overriding force driving synergy: whatever he cares most about in that particular moment. It has not required a full merger, for instance, for Tesla and SpaceX to join forces on important strategic projects. These include investing in a chip fabrication plant or working together on building an enterprise AI platform."}],[{"start":73.15,"text":"Would these things be easier if they all happened inside one corporate entity? Probably. But ownership structure has not been an impediment so far. Rather, other considerations are more important in determining the likelihood and timing of any union, if Musk’s record of dealmaking is any guide."}],[{"start":90.15,"text":"The main question is what arrangement of corporate assets makes most financial sense in terms of maximising the stock price and of making it easier to raise capital. Tesla’s acquisition of SolarCity and xAI’s of the former Twitter were cases in which Musk used stronger companies to buy out struggling businesses."}],[{"start":108.4,"text":"Meanwhile, Tesla’s investment needs are rising, turning its free cash flow negative this year and adding to the financing strain across the Muskverse. The question: Would Wall Street prefer one Musk stock or two?"}],[{"start":121.35000000000001,"text":"In the run-up to the SpaceX IPO, there were concerns that Tesla’s shares would suffer as investors sold out of one Musk vehicle to back another. But the market has shown a clear appetite for both. Tesla shares are down on the year but within 20 per cent of their record."}],[{"start":137.4,"text":"Tesla’s car business has certainly been under pressure, perhaps giving Musk a stronger reason to fold it into SpaceX. But the carmaker’s heady share price now reflects its prospects as a robotics company, its fortunes tied to robotaxis and selling humanoid robots."}],[{"start":154.65,"text":"The main question is whether investors would value Musk’s businesses more highly if they resided inside one company rather than two. If folding Tesla into SpaceX was seen as an admission that it was running out of road in electric vehicles, it might be taken as a sign of weakness. That could set up a battle between two powerful stock market forces: the premium that Wall Street gives to Musk-controlled businesses versus the discount it traditionally applies to sprawling conglomerates."}],[{"start":184,"text":"Another consideration, meanwhile, is likely to play a big role in any deal: whether it enhances Musk’s personal power and flexibility. From this perspective, folding Tesla into SpaceX looks like a no-brainer."}],[{"start":197.1,"text":"The voting control he has by way of the rocket and AI group’s special class of B shares, along with extra governance protections, put him in a strong position. One way to prevent that power from being diluted by an all-stock union with the carmaker would be for SpaceX to use a third, non-voting class of C shares it has the power to issue."}],[{"start":217.04999999999998,"text":"Musk has long wanted more control over the EV maker, as memorialised by his notorious 2018 tweet that he was “considering taking Tesla private, funding secured”. If he folded it into SpaceX, he would get the next best thing."}],[{"start":233.14999999999998,"text":"That does not guarantee a deal would not face opposition. After moving Tesla’s corporate registration to Texas, Musk has a freer hand but shareholders would still have to support any deal. "}],[{"start":244.59999999999997,"text":"Musk would be on both sides of any transaction, but with an economic interest of about 40 per cent in SpaceX, double his stake in Tesla, he would seem to have a clear incentive to favour one side over the other. If SpaceX’s shares maintain the sort of run they have had since the IPO, boosting its stock as a takeover currency, it could also encourage him to move sooner rather than later. Many investors already seem inured to the idea of a giant union. Timing, and the Tesla premium, will be all."}],[{"start":281.25,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1781831484_3220.mp3"}