Yea, obviously.

Hadn’t thought much of this one way or the other, but after reading this by Matt Levine, the SpaceX-Tesla merger just seems like a nothing-burger: Of course they should be a single entity! Following the HOWs is gonna be fantastic

Back in the day, Elon was eccentric and ran many different things: he wanted to build cars and go to Mars, rescue American democracy and invest in AI. Now, by some miracle of entrepreneurial foresight, all of those themes are coming together. It’s all one trade, we used to say about the debasement… well, now the Elon Trade is just all one thing.

Also, it’d be really good for large creditors —  whom Musk really wants and needs to appease:

 Credit investors do not want concentrated bets on weird stuff with high upside; they want to get paid back with interest. A giant company with a diversified set of bets is a better credit risk than a spiky company with telekinetic monkeys. “Give us $100 billion to build data centers in space, but if for some reason we don’t build data centers in space you can repossess our car factories and data centers on earth” is a good pitch to credit investors.

Still, no (or at least not much) money will change hands, cuz everyone always sort of knew it was Elon’s companies, and nothing real (i.e., on the ground; or in space, as it were) changes. But…

Presumably any deal would be an all-stock merger-of-equals-ish in which neither company gets a premium, but you still have to pick an exchange ratio. You have to get banks to provide fairness opinions. Do discounted cash flow valuations of the data centers in space and the robot army, fun stuff.

This will, presumably, be the largest corporate merger in history — with the lowest, incredibly cheap bankers’ fee for it:

This would in theory be a $3.5 trillion merger, and bankers are traditionally paid a percentage of deal value; a 0.1% fee would be $3.5 billion. I would take the under on that. The bankers are not, I suspect, going to be doing a lot of heavy lifting on valuation, negotiation, due diligence or financing. This is one guy merging his two companies; he could negotiate the terms with himself in five minutes. Technically he won’t, though; he said on the earnings call: “Because I’m a conflicted party, I can't actually be in the discussions of the special committees.

Welcome to SI, the super intelligence… or how everything is becoming one trade: the Elon Trade.

Fantastic:

If Elon Musk is going to run a gigantic AI infrastructure company, it should be one company with one set of shareholders. That would solve a lot of governance complexity and make everyone a lot more chill about Musk’s potential conflicts of interest. They just have to do one last conflicted transaction to get there.

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