ARK’s Brett Winton on the podcast 1. Over the weekend, SpaceX executives followed Tesla’s X account. That looks like a sign that something is happening internally. 2. SpaceX is cash-flow constrained. It could raise more money in the stock market, but the investment opportunities in front of SpaceX offer some of the highest expected returns on invested capital(ROIC) of any company I’ve ever looked at. 3. Tesla, on the other hand, is about to enter the phase where its robotaxi network starts generating huge amounts of cash. And I don’t think Optimus is cash-constrained. The issue is execution. There are still challenges to solve on both the mechanical and software sides. 4. So if SpaceX could use Tesla’s free cash flow to launch AI satellites, the results could be enormous. Every business of a future-oriented company would come together under one roof: SpaceX, superintelligence, and Tesla. In short, SpaceX has huge long-term opportunities, but it needs Tesla’s cash flow to get there. The ones who really need this merger right now aren’t Tesla. They’re SpaceX and Elon. If they really want to do it, they need to bring an exchange ratio generous enough to pass the shareholder vote on the first try. Some influencers keep pushing the merger as if it’s the only option, without even mentioning a premium. All that does is hype up retail investors and weaken Tesla shareholders’ negotiating leverage. That’s irresponsible, and it deserves to be called out.

The answer is clear. 1. From Elon’s point of view, of course he wants this merger. It would give him far more voting control over Tesla. 2. From SpaceX’s side, it makes sense too. SpaceX needs a cash cow to fund its massive space investments. Its data center rental business runs on spot pricing, so its profits are volatile and low quality. Tesla’s upcoming robotaxi cash flow is exactly the stable income SpaceX lacks. 3. But for Tesla shareholders other than Elon, why merge now, at today’s valuations? Maybe later, but not now. Tesla has $45B in cash and is just about to start making real money from robotaxis. That’s exactly why the deal has to come with a premium Tesla shareholders can’t refuse.