Musk's SpaceX-Tesla merger endorsement reportedly raises concerns inside talks

Elon Musk's endorsement of a possible SpaceX-Tesla merger has reportedly unsettled some participants in the negotiations. A person familiar with the discussions says they worry his remarks could increase shareholder scrutiny and slow the process by several weeks.

The companies have reportedly retained advisers, with negotiations still preliminary. Options said to be under consideration include SpaceX buying Tesla or placing both businesses under a new holding company, potentially using shares as payment. Those arrangements remain unconfirmed.

The concerns reportedly center on whether Tesla investors would receive adequate protection from Musk's influence. Tesla's purchase of SolarCity in 2016 prompted years of shareholder litigation over his involvement, although courts ultimately upheld the transaction.

Speaking during SpaceX's October 20 earnings webcast, Musk confirmed that independent directors at each company were evaluating a combination. He said his conflicting interests prevented him from participating in their discussions, while identifying AI, semiconductor development and robotics as areas that could benefit from closer cooperation.

Musk said the committees had not settled transaction terms and cautioned that a merger was uncertain. Any proposal would first need agreement from the committees before going to shareholders, he said.