Tesla-SpaceX merger announcement still seen as unlikely this year

Traders still consider it unlikely this year that Tesla or SpaceX will officially announce a merger, even after bets on a year-end announcement surged on Thursday afternoon. The jump came in a matter of minutes and on unusually heavy trading. No clear reason for it has emerged, and neither company has announced a deal.

The surge reverses a slide from earlier in the month. Expectations of an announcement before the end of December drifted lower in late October and then roughly halved on Nov. 2, leaving it a long shot. They sat there, barely moving, for ten days before Thursday's jump lifted them above where they stood at the end of October. No verified trigger was found for the Nov. 2 drop either.

Longer time frames tell a different story, and they did not move on Thursday. Traders see an announcement by the end of January or February as a toss-up, and they consider one likely by the end of June, more so before 2028. In other words, the expectation is that the two Elon Musk companies will announce a combination, just not in the next seven weeks.

The speculation dates to Oct. 20, when Musk said Tesla and SpaceX had each formed a special committee to consider a merger, while cautioning that no agreement was assured, NBC News reported. SpaceX later confirmed its committee in a quarterly filing with the Securities and Exchange Commission. Forming committees is not the same as announcing a deal. What counts is an official statement that one company will be acquired by or merged with the other, or a sale of a controlling interest. The transaction itself would not have to close this year.

Analysts have fed the talk. Barclays suggested a deal could be announced before Tesla's annual meeting, according to Reuters, and JPMorgan sketched out a possible transaction, though that was an analyst scenario rather than an offer. Bloomberg Law reported on Nov. 9 that no definitive agreement had been announced.

The next scheduled event is Tesla's annual shareholder meeting on Dec. 3. The company's published proxy statement does not list a merger vote, so any announcement around the meeting would have to come from the companies separately. Beyond that, there is no fixed date on which the committees are due to report.