Tesla Inc and SpaceX have already merged in everything but name, according to a new analysis from Sherwood News, the financial media outlet spun out of Robinhood Markets Inc.

The piece, published today, lays out the case that Elon Musk’s empire is converging fast. Tesla poured $2 billion into xAI. SpaceX absorbed xAI in a $1.25 trillion all-stock deal. Tesla then converted its xAI shares into a SpaceX stake, per FTC filings dated March 11.

Chamath Palihapitiya doesn’t think SpaceX will go public at all. He thinks Musk will fold it into Tesla instead.

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“I think that it will reverse merge into Tesla, and I think Elon will use it as a moment to consolidate control and power of his two seminal assets into one cap table,” he said on the All-In Podcast last month.

Dan Ives at Wedbush Securities agrees on the direction, writing in a February note that he expects “more cross-pollination between Tesla and SpaceX over the coming year” and that the two companies will eventually merge.

Polymarket traders are skeptical. A contract on a Tesla-SpaceX merger prices it at just 10% by June 30. A separate contract on a SpaceX IPO by 2028 sits at 96%.

The gap may reflect Tesla’s fundamentals. Revenue fell 3% in 2025, its first annual decline on record.

The stock is down about 15% year to date, one of the worst Magnificent Seven performers.

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Polymarket’s Q1 deliveries contract has 65% odds on under 350,000 units, consistent with the bearish trend.

In other words, prediction market traders may be saying that SpaceX, with Starlink booming and a record IPO on deck, has more to lose than gain by tying itself to a shrinking car business.

Musk owns about 42% of SpaceX versus 13% of Tesla. A stock deal would massively concentrate his control.

A combined company would vault Tesla from roughly the 10th most valuable company in the world into the top tier.

SpaceX is reportedly targeting a $1.75 trillion valuation for its planned June IPO.

Polymarket traders give 69% odds Musk becomes the first trillionaire before 2027.

Whether SpaceX goes public or folds into Tesla could be the variable that determines how he gets there.

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