SpaceX Could Play Crucial Role in Taking Tesla Private

Elon Musk (Credit: SpaceX)

CNBC has an update on Elon Musk’s pursuit of making Tesla Motors a private company once again.

Morgan Stanley is telling its clients Elon Musk’s stake in SpaceX may be leveraged as a source of funding for his plan to take Tesla private….

“Elon Musk’s desire to potentially take Tesla private may require large amounts of new equity capital. We see scope for SpaceX to play a potentially crucial role in facilitating the required financing as well as the strategic narrative going forward,” analyst Adam Jonas said in a note entitled “How SpaceX Can Potentially Help Tesla Go Private” to clients Monday. “We believe investors should consider the potential role of SpaceX in the near-term financial options confronting Tesla and its shareholders.”

….In a blog post later that day, Musk said “the intention is not to merge SpaceX and Tesla.”

Despite the comment, Jonas said SpaceX could invest directly in Tesla as part of a strategic partnership.

“While we are in no position to dispute this statement on a merging of the two entities, we do not expect Elon Musk to rule out the potential for the involvement of SpaceX as a capital-providing strategic partner or the potential for the value of SpaceX equity held within Mr. Musk’s trust to be considered in the financing of a potential Tesla buyout,” Jonas said. “We see increasingly compelling areas of industrial and strategic cooperation between SpaceX and Tesla in telecommunications / satellite broadband which we see as potentially advantageous for shared and automated transport networks.”

Show of hands if all this sounds a bit familiar. Tesla Motors took over SolarCity in what Musk called a “no-brainer” of synergies and which critics charged was a conflict of interest riddled bailout of a failing company about to go under that benefited Musk and two cousins. The deal added to Tesla’s already enormous debt load.

Some critics are predicting Tesla will go bankrupt this year; Musk disputes that. SpaceX is also in better shape than Tesla was when it absorbed SolarCity.