Deepwater Asset Management's Gene Munster has increased the probability of a merger between Tesla Inc. and Space Exploration Technologies Corp. to 90% after Elon Musk highlighted the companies' expanding collaboration. Munster, who previously assigned an 80% chance to the combination, raised his odds following Tesla's latest earnings call, where executives entertained questions about a potential tie-up. Musk noted that while the companies share a great relationship, any discussion of further integration must follow appropriate legal processes.

Expanding Collaboration

Musk detailed the growing overlap between Tesla and SpaceX, specifically mentioning the Terafab project as a "gigantic" initiative driving closer cooperation. The integration extends to artificial intelligence and connectivity, with Grok being incorporated into Tesla vehicles and Starlink providing satellite connectivity for the Cybercab and future models. Musk emphasized that satellite connectivity is crucial to prevent Robotaxis from losing signal in areas with poor cellular coverage.

Prediction Market Data

Data from Kalshi, a federally authorized betting platform, indicates significant market interest in a potential merger. Over $402,000 has been bet on the contract "When will Tesla and SpaceX merge?" Bettors have assigned a 41% probability of the two companies merging "Before Mar 1, 2027," which rises to 45% for "Before May 1, 2027."

Second Quarter Financial Results

Tesla reported financial results for the second quarter, with revenue reaching $28.24 billion, surpassing the Wall Street estimate of $25.71 billion. However, earnings per share came in at 33 cents, missing analysts' expectations of 50 cents. The company delivered a record 480,126 vehicles during the quarter, representing a 25% increase compared to the previous year.

Key Financial Metrics

Market Reaction

Following the earnings announcement, Tesla shares closed 1.30% lower on Wednesday and fell an additional 4.13% in after-hours trading. Benzinga edge rankings indicate Tesla has a Momentum score in the 36th percentile and a Growth score in the 88th percentile.

Tesla Inc. retained its Bitcoin holdings during the second quarter, absorbing $112 million in paper losses as the value of its digital assets declined. The company held $674 million in digital assets as of March 31, a drop of 14.24% from the previous quarter and 45% year-over-year. Despite the losses, the Elon Musk-led firm did not liquidate any of its cryptocurrency investments, which are grouped under the digital assets line item in its financial statements.

On-chain analytics firm Arkham Intelligence reports that Tesla's stockpile consists solely of 11,509 BTC, unchanged from the prior quarter. The 14.24% decline in the value of these assets aligns with Bitcoin's price movement during the second quarter. Tesla stands as the twelfth-largest corporate holder of Bitcoin, trailing Strategy Inc., which holds a stockpile worth over $55 billion.

Financial Performance

Beyond its cryptocurrency holdings, Tesla reported second-quarter revenue of $28.24 billion, beating analyst estimates. The company noted that it reached $100 billion in trailing twelve-month revenue for the first time in its history during the quarter. However, earnings per share fell short of market expectations.

Asset Valuation

The following table details the changes in Tesla's digital asset holdings:

Tesla previously accepted Bitcoin as payment for vehicles but halted the practice due to concerns regarding the energy consumption associated with Bitcoin mining. The company does not provide a specific breakdown of its cryptocurrency holdings in its regulatory filings.