Texas AG-elect vows scrutiny of Tesla-SpaceX merger; Tesla holders would fund about half the premium
Nathan Johnson takes office in January with leverage over the beaches, land and water SpaceX runs on. For Tesla holders, that scrutiny lands on a premium they would mostly pay themselves, across a 12-to-18-month wait to close.
Richard Tangthree-minute read
Texas flipped on November 3, and the merger Musk's boards want to announce in December now runs through a Democrat who promises it a hard look 12. Attorney General-elect Nathan Johnson, who replaces Ken Paxton in January, said on November 12 that a merger "of that consequence warrants tremendous scrutiny" and that he has "no qualms about examining" Musk's relationships with the state 12. He named no specific investigation 1. The posture alone matters, because a longer road to closing is the one thing an all-stock premium cannot survive.
The state controls what Starbase runs on
Johnson's leverage is not the deal itself; it is everything around it. Land commissioner-elect Benjamin Flores will ask the attorney general whether the statute that lets SpaceX−2.57% — SpaceX, down 2.57 percent today close Boca Chica Beach for launches is constitutional, and without those closures Starbase cannot fly 6.
Governor-elect Gina Hinojosa has pressed Parks and Wildlife to take no action on selling Boca Chica State Park; SpaceX said November 13 its proposal covers about 1,200 acres around the launch site, not the beach 7. The closures, the land and the water all came from a state whose new officials won over candidates Musk backed with hundreds of millions 6.
Tesla holders would fund half their own premium
None of this stops an announcement: Bloomberg reports one could come in December, and Dan Ives puts the odds at 90% 3. Musk confirmed the talks in October, with special committees of independent directors on both boards 4. Gary Black of The Future Fund expects an all-stock deal and a year to 18 months between announcement and close 3. At his 20% premium guess, Tesla−2.61% — Tesla, down 2.61 percent today holders would take SpaceX stock worth about half the combined company, so they would fund about half their own premium 3. SpaceX has already slid 12% since the talks were confirmed; a 17% slide erases the premium 3.
SpaceX has already slid most of the way to erasing a 20% premium
Since Musk confirmed the talks, SPCX has fallen most of the way to wiping out the premium
Data
| Value | |
|---|---|
| Slide since talks confirmed | 12% |
| Fall that erases a 20% premium | 17% |
| Fall from June record close | 31% |
Marvell's−7.21% — Marvell, down 7.21 percent today week-old offer for Lumentum−6.65% — Lumentum, down 6.65 percent today already trades below Lumentum's pre-deal price 3. That is what a long close does to a stock premium.
Watch the exchange ratio, not the announcement
The industrial case is real: Walter Isaacson calls avoiding the merger "almost inconceivable" because the two are already building the Terafab chip plant together 5, and SpaceX just announced more than $74 billion for AI supercomputing campuses 8. But factory logic is not shareholder value: SPCX trades today, so anyone who wants that exposure does not need Tesla to get it 3. Tesla's December 3 meeting has no merger vote on its agenda 4, and approval needs a majority of all outstanding shares 3. Polymarket still puts roughly four-in-five odds on a merger by the end of 2027 5.
A premium you pay half of yourself is not a windfall. The deal will probably happen; the windfall was never in it.
Get Deals by email, free
The acquisitions, rounds and contracts that move AI money. In our daily email, every weekday.
Reader comments
0 comments