Elon Musk [Reuters/Yonhap News file photo]Although it has been less than a week since Elon Musk's aerospace company, SpaceX, went public, rumors of a massive merger between SpaceX and his electric vehicle company, Tesla, are already circulating in the market.

Speculation suggests that Musk—the founder, CEO, and largest shareholder of both companies—intends to merge the two entities to create a giant corporation valued at $4 trillion (approximately 6,080 trillion won).

Of course, such a prospect is not new. For some time, investors, analysts, and even some senior SpaceX executives have mentioned the benefits of a merger between the two companies in social media posts, stock reports, and television interviews.

The two companies have already been sharing executives and resources for a long time and have been jointly carrying out multi-billion-dollar projects.

The New York Times (NYT) reported on the 17th (local time) that while some shareholders might oppose the merger, there is little they could do if Musk decides to push forward with it.

Through dual-class stock structures and other means, Musk holds 84% of the voting rights in SpaceX. Additionally, he recently exercised all stock options granted as part of his 2018 compensation package, boosting his voting stake in Tesla to 20%.

Since Musk holds controlling interest in both SpaceX and Tesla and is the largest shareholder in both, a merger between the two would effectively be a transaction with himself.

Such a merger could potentially lead to lawsuits on the grounds that it ignores the interests of other shareholders.

However, legal experts believe it would not be easy to block Musk's merger through legal action. Since the headquarters of both companies are located in Texas, the state's relevant laws make it very difficult for shareholders who oppose a merger to challenge management decisions.

Tesla moved its headquarters from Delaware to Texas last year, and SpaceX followed in 2024.

In Delaware, any shareholder can file a lawsuit against a company, but in Texas, one must hold at least a 3% stake to initiate such litigation.

"Essentially, Musk has put himself in a position where he can do almost anything he wants," said Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware.

Shareholders with 3% or more stakes are generally only large investment firms like Vanguard or Fidelity, which typically do not participate in such litigation.

While small shareholders could potentially pool their shares to exceed the 3% threshold, doing so would be difficult. Tesla’s market capitalization is around $1.5 trillion, meaning those opposing the merger would need to amass shares worth $45 billion.

"You need a massive amount of shares (to oppose the merger). That is a very high hurdle," said James Spindler, a corporate law professor at the University of Texas School of Law.

SpaceX logo [Reuters/Yonhap News]

If the two companies merge, they are expected to continue their current operations in rocket manufacturing, artificial intelligence (AI), and satellite internet services (Starlink), as well as electric vehicle and battery production, solar energy hardware, and the social media platform X (formerly Twitter). The two companies are already collaborating on projects such as space data centers, autonomous robotaxis, and humanoid robots.

For a merger to occur through a stock swap, it would require the approval of two-thirds of Tesla shareholders. Musk already holds 20% of Tesla’s voting rights, and a significant portion of the remaining shareholders hold Musk in high regard—having even approved a compensation package nearing $1 trillion contingent on Musk achieving his goals.

"Musk has a base of ardent supporters who will follow him wherever he leads, whether it's through the gates of hell or into heaven," Elson said.

Brian Quinn, a professor at Boston College Law School, predicted that given the massive voting power Musk holds in SpaceX, he would be able to maintain a majority of voting rights in the merged company even after acquiring Tesla.

Regulatory opposition could be a factor, but that seems unlikely during President Donald Trump's term.

Musk has donated hundreds of millions of dollars to Republican candidates, including President Trump, and the Trump administration has not historically challenged other large-scale merger cases.

 [Reuters/Yonhap News file photo]