Zara Reyes: Hey — good, fine, totally normal night, just watching the SpaceX earnings drop and my phone basically exploded.
Cole Bryant: Same. Mine too. Wait — did you see the actual profit number first or the merger thing first?
Zara Reyes: Profit number. Four point four billion. Which — coming from a one point one billion net loss a year ago — that's the kind of swing that makes a merger announcement land differently.
Cole Bryant: Because the room is already hot, right? Like — okay, so the revenue is fourteen point six billion, up a hundred and sixty one percent, everyone's celebrating, and then Musk goes — oh, also, SpaceX and Tesla just formed independent special committees to look at a merger. October twentieth. On the earnings call. That's where he chose to drop this.
Zara Reyes: You don't bury that on an earnings call. You architect it there.
Cole Bryant: And then — no, wait — he says he's personally excluded from committee discussions as a conflicted party. The guy who controls both companies. Recused.
Zara Reyes: SpaceX shares popped four point nine percent in extended trading the moment it came out. So the market is not confused about what this means.
Cole Bryant: Bro this is only SpaceX's second-ever quarterly disclosure as a public company — they IPO'd in June — and they're already dropping merger news. That timeline is insane to me.
Zara Reyes: And that's the part that doesn't get said out loud enough — Wall Street literally had one data point on this company before October twentieth. One. The Q2 disclosure from August. So they don't even have a baseline yet. They're still forming their opinion on what SpaceX is worth as a standalone.
Cole Bryant: Wait — so Musk drops merger news into a room that has basically no reference point for what SpaceX should even be trading at?
Zara Reyes: It's like a friend who asks to borrow money right after showing you their bonus. They're not being spontaneous. They're timing the ask for when you feel most generous. That's the whole move.
Cole Bryant: No — okay — and then he drops a trillion dollar revenue target for SpaceX by 2028 in the same breath. A trillion. Is that number — like, who signed off on that?
Zara Reyes: Nobody. It's not audited, not underwritten — it's just vibes at scale. A number big enough that it makes the merger feel small by comparison.
Cole Bryant: Bro that's wild. And then — SpaceX folded xAI into itself in February 2026, before the IPO even happened. So by the time Wall Street is meeting this company for the first time, it's already an AI company. The narrative was pre-assembled.
Zara Reyes: Piece by piece. And Barclays is already out there saying a deal announcement could come before Tesla's annual meeting, with SpaceX as the acquirer. That's not speculation, that's a timeline.
Cole Bryant: SpaceX buys Tesla. Not the other way. That sentence is — actually, no, sit with that for a second. The car company gets absorbed by the rocket company.
Zara Reyes: October twentieth wasn't an earnings call. It was the curtain going up on something that was already built.
Cole Bryant: But the curtain's being held up by — wait, okay, this is the take I keep seeing and I think it's completely wrong. The take is: Musk is formally recused, the committees are independent, so the process is clean. That's the thing people are saying.
Zara Reyes: He owns 45% of SpaceX and controls 82% of its voting power. You can recuse yourself from the room but you still own the building.
Cole Bryant: Right — but even past that. Ira Ehrenpreis. He chairs SpaceX's compensation and nominating committee. Simultaneously leading both equivalent committees at Tesla. The same person. Same role. Both sides of the deal.
Zara Reyes: That's not a conflict of interest, that's a conflict of identity. Ira Ehrenpreis of DBL Partners is literally the structure on both sides of this thing.
Cole Bryant: And James Murdoch — Tesla board. Also connected to the SpaceX board overlap. So it's not one person straddling both companies, it's — actually, how many people is this?
Zara Reyes: Enough that the word 'independent' starts doing a lot of work it cannot carry. And then — Musk himself, on the earnings call, called the recusal arrangement 'an odd kabuki dance.' His words. On the record.
Cole Bryant: He said the quiet part on a public earnings call. With analysts on the line.
Zara Reyes: Picture a Tesla shareholder at midnight, transcript open, reading 'independent committee' — and then literally four sentences later: 'kabuki dance.' Both phrases. Same document. That's the whole story.
Cole Bryant: The committees aren't a firewall, they're set dressing. And — we'll get to the approval threshold in a second because that's where this either lives or dies, and the synergy story has a specific problem baked into it.
Zara Reyes: The set dressing thing is actually what makes the approval threshold so important — because if the committees can't stop this, what can? And the answer is: fifty percent of all Tesla shares outstanding. Not fifty percent of shares voting. All shares.
Cole Bryant: Wait — every share that doesn't show up counts as a no?
Zara Reyes: Every abstention, every retail holder who doesn't open the proxy email, every index fund that stays quiet — all of it piles up on the no side. That's not a normal shareholder vote. That's a structural ceiling.
Cole Bryant: And Musk only holds around twenty percent of Tesla. So he can't even — wait, that means he needs massive institutional buy-in just to get to the floor.
Zara Reyes: Huge chunk. And there's no deal structure on the table yet. No exchange ratio, no timeline, nothing. So an institutional investor sitting on, I don't know, two percent of Tesla right now — they're being asked to pre-commit to a merger they literally cannot price. The math doesn't exist yet.
Cole Bryant: Okay but doesn't the synergy story do some of that work? Like — Musk named actual things. Terafab, AI chip design, robotics overlap. That's not nothing, right? I want to know what actually breaks if they stay separate.
Zara Reyes: That's the question. And here's what doesn't land for me — Starlink has thirteen point six million subscribers and average monthly revenue per subscriber fell to sixty-nine dollars. Subscriber growth is outpacing what they can actually charge people. So the trillion-dollar target by 2028 needs revenue streams that don't exist yet, and 'Terafab synergies' is not a line item.
Cole Bryant: Dude. The combined entity would be three point five trillion dollars. And who concentrates more voting control in that scenario? The one guy who already controls both. That's — actually no, that's the thing institutional investors have to sit with.
Zara Reyes: Which is exactly why Tesla shareholders who bought an EV company are being asked to fund a space-superintelligence empire on a revenue target nobody has audited. The fifty-percent threshold is the only mechanism that gives them any say. Watch whether Ehrenpreis's committee triggers a majority-of-the-minority vote under Delaware's entire-fairness doctrine — because if it does, Musk's twenty percent doesn't even count toward the floor. That's the number to track.
Cole Bryant: Okay my one detail — the kabuki dance line. Musk, on a live earnings call, with institutional investors on the line, just... says that out loud. Like he's bored of pretending.
Zara Reyes: Mine is no exchange ratio. Nothing. Not a number, not a structure, not a timeline. Institutional Tesla investors are being asked to feel good about a deal they literally cannot price yet.
Cole Bryant: And Barclays is out there saying it could close before Tesla's annual meeting — bro, before the annual meeting — and there's still no deal on paper. That's — wait, that's insane? That's actually insane.
Zara Reyes: Musk needs institutional Tesla holders to clear fifty percent of all shares outstanding — not shares voting, all shares — on a merger with no terms. That's the vote. That's the whole game.
Cole Bryant: Honestly? Toasting to the Tesla shareholders who are going to open that proxy email, stare at a blank exchange ratio field, and just... decide. Good luck out there. We're rooting for you.
