Prediction market Kalshi now gives a 60% probability that Tesla and SpaceX will merge before 2028. The figure, based on real-money trading by users, reflects growing speculation about Elon Musk's next move for his two most valuable companies.
What Kalshi's market shows
Kalshi, a federally regulated prediction exchange, allows traders to buy and sell contracts on binary events. The Tesla-SpaceX merger contract pays out if the two companies combine — through a formal acquisition, reverse merger, or other corporate structure — by the end of 2027. A 60% price implies the market sees the deal as more likely than not.
Musk is CEO of both companies. Tesla is publicly traded with a market cap around $800 billion. SpaceX remains private, valued at roughly $180 billion in its most recent secondary share sales. A merger would require approval from Tesla shareholders and likely scrutiny from antitrust regulators.
Why traders are betting on a deal
Musk has long hinted at closer ties between the two. In 2020 he said a merger was “not impossible.” More recently, he floated the idea of using Tesla's battery and manufacturing expertise to help SpaceX scale Starship production. Some investors see a combined entity as a way to streamline capital allocation and cross-license technology.
Kalshi's probability has climbed from around 35% in early 2024 to the current 60%. The jump followed Musk's public comments about Tesla's board exploring “strategic alternatives” for its cash reserves — a phrase some traders interpreted as a prelude to a SpaceX deal.
The hurdles ahead
A Tesla-SpaceX merger would face significant legal and financial obstacles. Tesla is a public company with fiduciary duties to shareholders. Any deal would need a fairness opinion and approval from a majority of disinterested stockholders. SpaceX's valuation is also opaque, making it hard to set an exchange ratio without litigation risk.
Regulatory roadblocks could be even tougher. The Federal Trade Commission and the Department of Justice would review the merger for antitrust concerns. Combining the dominant electric-vehicle maker with the leading private space-launch firm might raise questions about vertical integration and market power in satellite internet, where SpaceX's Starlink competes with terrestrial providers.
Musk's own track record adds uncertainty. He has previously announced and then abandoned major corporate moves — including taking Tesla private in 2018, a plan that led to SEC charges. A merger would also require him to manage two very different corporate cultures and workforces.
What happens next
Kalshi's market will continue to trade as new information emerges. The next catalyst could be Tesla's annual shareholder meeting in June, where Musk may face direct questions about the merger idea. If the probability stays above 50%, more institutional money could flow into the contract. If it drops, traders will look for signs that Musk has shelved the plan — or that regulators have signaled opposition.
