AUSTIN, Texas — The boards of Tesla and SpaceX have each formed a special committee to review a possible combination of the two companies, according to reports published Tuesday. No agreement has been reached, and there is no guarantee one will be.
Gordon Abbitt, a retired insurance adjuster from Dayton, Ohio, owns 60 shares of Tesla and 12 shares of SpaceX. He read the reports Tuesday night at his kitchen table, then spent about two hours on a legal pad.
“You take the two companies and you put them together, and what you get is one company, and that company is worth less than the two you started with,” Abbitt said. “The paperwork is the expensive part. You pay for the other one to stop being separate, and then you have less of everything, spread out across fewer things.”
Abbitt said the arithmetic was not complicated. A share of Tesla, combined with a share of SpaceX, he said, produces one share of a smaller company, which he described as a more manageable size for a shareholder.
“Combined, the two companies would be smaller than either one,” Abbitt said. “That is the whole point of a merger.”
Dr. Marjorie Teller, director of the Center for Measured Outcomes, said her organization had reviewed Abbitt’s calculations and found them “extremely efficient.” Asked what the calculations measured, Teller said they had been done on a calculator, which she described as the most reliable instrument the household owns. Teller said the Center would be happy to measure the merger once it is announced, and once it is smaller.
Chad Brickhouse, a senior fellow at the Institute for Common Sense, said the market would eventually agree with Abbitt. “The market is a very good judge of value,” Brickhouse said. “It has judged both of these companies at very high numbers already. Merging them down is just the market settling into a more reasonable shape.”
Asked whether any analyst had reached the same conclusion, Brickhouse said he had not read any analysis, but had heard the idea “in a car wash, from a man who sells gutters, and he seemed sure.”
Abbitt said he had no plans to sell either share before the committees finish their work. He said he would hold both until the merger was announced and then sell whichever company had become the smaller one, so that he would at least be left with the bigger of the two.
He has not decided what to do with the difference.