Tesla-SpaceX merger bets slip for January, but a deal before 2028 still looks likely

Traders cut their expectations that Tesla and SpaceX will announce a merger by the end of January, with the drop coming overnight into Thursday. An announcement in that window is now unlikely, and the reason for the drop is not clear. No new announcement or report explains it, and neither company has announced a merger.

The drop followed a stretch of relative calm. Bets on a January announcement jumped on Saturday after Elon Musk's comments about merger committees spread, then held fairly steady through Monday and Tuesday. They eased on Wednesday and then fell in a few minutes overnight, leaving them clearly below where they stood when this story began.

The pullback is narrow. Across the longer deadlines, traders still expect a deal to surface in 2027. Their central estimate for an announcement is around mid June 2027, later than the around late May 2027 they expected earlier this week. The range runs from before December 31 to not by December 31, 2027. A deal by the end of June 2027 remains a toss-up. An announcement before 2028 still looks likely, and expectations for that deadline have firmed this week. An announcement by the end of this year or by the end of February is unlikely.

Speculation built through mid-October. Tesla unveiled a new Roadster on Oct. 15 using SpaceX-developed thrusters. Barclays analysts then said an announcement could come as soon as this fall. On Tuesday, Musk said on SpaceX's earnings call that both companies had formed committees of independent directors to look at a merger. He said he saw merit in combining them but stressed that a deal was not certain.

On Wednesday, JPMorgan analysts sketched a possible all-stock deal led by SpaceX that would include a premium for Tesla shareholders, Yahoo Finance and Stocktwits reported. Reuters reported that Wall Street sees a combination as inevitable but is split on price. The JPMorgan outline was an analyst scenario, not an offer or a company announcement. Those events came before the latest drop, so they do not explain it.

The next clear marker is Tesla's annual shareholder meeting, expected around early December, when a merger proposal could surface. No official announcement has been reported. Analysts have noted that an announcement in late October or early November could make it harder to seek shareholder approval at that meeting. The main things to watch are the committees' findings, any proposed terms, shareholder support and regulatory obstacles.