- SpaceX’s amended filing has sparked speculation about a potential merger with Tesla in the future.
- The rocket maker stated in the filing that it could issue “significant equity” in “future transactions” post its IPO.
- Elon Musk has thought about merging his companies for years
Elon Musk's SpaceX is set to debut its initial public offering (IPO) as early as this month. A line, however, in its amended filing has sparked chatter about a potential merger with Tesla down the line. SpaceX is warning investors that it could issue “significant equity” in “future transactions” following its upcoming public issue.
The new language was included in the risk factors section of the rocket maker's first official amendment to its IPO filing. The company tacked a sentence at the end of the first paragraph of a risk on how mergers and acquisitions may not pan out as expected.
“We may issue a significant amount of equity in connection with future transactions,” the line reads.
While SpaceX could have other companies in mind for a merger after its IPO, the line seems to be warning investors about the possibility of a major dilution event, such as coming together with Tesla, TechCrunch reported.
Elon Musk has thought about merging his companies for years, and the SpaceX IPO is fueling speculation that he could finally bring his two biggest entities together.
A merger of this size may face a number of legal and potential regulatory challenges, and would probably have to pass a shareholder vote at Tesla.
But on the other side, Musk has supreme voting power at SpaceX, the firm's IPO filing showed.
He owns Class B shares, which have 10 votes per share. By contrast, Class A shares come only with one vote per equity and Class C common stock does not have voting rights at all.
Currently, SpaceX's Class C shares are used for executive compensation. Musk may utilise the stocks to buy other firms without diluting his power.
SpaceX's IPO has reignited speculation around a possible merger with Tesla. Last month, people familiar with the matter told CNBC that Elon Musk had held discussions with colleagues about the possibility of bringing the companies together.
A current Tesla employee told the outlet that many workers at the EV maker long expected such a move would eventually take place, adding that the topic was openly discussed internally.
SpaceX may start marketing its IPO as soon as June 4 and price the shares on June 11, as per reports. The shares will start trading the next day.
