Musk's $3.5-trillion what-if: SpaceX just posted a monster quarter and a Tesla merger is on the table

The quarter

SpaceX crushed expectations in its third quarter, reporting $14.58 billion in revenue — up 161% from a year earlier — and $4.4 billion in net income, a turnaround from a $1.1 billion loss in the same quarter last year, according to reporting on the company's results. Adjusted EBITDA hit $8.8 billion, and the company closed the quarter with $53.4 billion in cash.

The company listed in June in what was described as the world's biggest IPO, raising $75 billion — though shares are down about 8% since then, according to Investor Daily reporting.

Investors loved the numbers: SpaceX shares (Nasdaq: SPCX) jumped roughly 8% in after-hours trading Tuesday, according to Investing.com.

The merger bombshell

The bigger story broke on the earnings call. Musk confirmed that Tesla and SpaceX have each formed a special committee of independent directors to study a possible merger — set up at the request of shareholders, answering a question from Deutsche Bank analyst Edison Yu. Musk said he is recused from the discussions as a conflicted party.

"Some people out there assume that a SpaceX and Tesla merger is a certainty, and I think that would be overstating it," Musk said, according to the call transcript published by Benzinga. He backed the idea — "Do I think it would be a good idea? Yes" — but stressed the committees have agreed on no terms and there is no guarantee of a deal.

The hurdle is high: a merger would need approval from a majority of ALL outstanding Tesla shares, not just those voting — a standard Musk himself called difficult. Based on Tuesday's closing prices, SpaceX is worth about $2 trillion and Tesla nearly $1.5 trillion, per AIStockWire — a combined market value near $3.5 trillion. Barclays analysts had noted earlier this month that a combination could be announced before Tesla's December 3 shareholder meeting.

The Canadian angle

Tesla sells its EVs across Canada, Starlink is the backbone of rural and northern connectivity from B.C. to Nunavut, and SpaceX just carried Canadian astronaut Joshua Kutryk to the International Space Station on Crew-13. A merger would put Musk's car company, satellite network, and rocket business under one roof — and a lot of Canadian customers and connectivity would sit inside it. Tesla reports its own Q3 results today after market close.