JPMorgan: Potential Obstacles to Tesla and SpaceX Merger Underestimated

TechFlow news, July 08, JPMorgan analyst Rajat Gupta stated that although the merger of Tesla and SpaceX "looks reasonable on paper", current speculation surrounding the merger underestimates the potential obstacles hindering the transaction. Potential obstacles include regulatory approval across multiple jurisdictions; governance and voting rights symmetry; and the perception that "the merger is seen by outsiders as an acquisition led by SpaceX, rather than a merger of equals".

He added: "Overall, we will focus on SpaceX's acquisition currency, the regulatory landscape, and Musk's voting rights at Tesla as catalysts for the impending potential merger". JPMorgan stated that if the transaction occurs, the most likely structure will be an all-stock acquisition of Tesla led by SpaceX. (Jin10)