Ross Gerber has a blunt prescription for Tesla’s governance headaches: if Elon Musk insists on running half a dozen companies at once, merge the biggest ones together and let shareholders ride the full portfolio. The CEO of Gerber Kawasaki Wealth and Investment Management, a Los Angeles-based firm that counts Tesla among its largest public holdings, laid out the argument on X in early 2026. “Merge SpaceX into Tesla. Let shareholders participate in the upside instead of just dealing with the chaos,” he wrote.
Gerber is not a newcomer to Tesla agitation. He sought a seat on Tesla’s board in 2023, campaigned publicly against Musk’s involvement with the Department of Government Efficiency in 2025, and has built a following as one of the automaker’s most vocal institutional critics. His merger pitch, though, lands at a moment when the underlying corporate plumbing suggests the idea may not be entirely hypothetical.
A legal entity and a Reuters report
In late January 2026, the Guardian, relaying a Reuters report, disclosed that SpaceX had created a “merger sub,” a shell entity that lawyers typically form when they begin scoping out a potential corporate combination. People familiar with the matter told Reuters the entity is part of early feasibility work exploring a tie-up that could involve Tesla and Musk’s artificial intelligence venture xAI.
Neither Tesla nor SpaceX has confirmed active negotiations. No binding agreements have appeared in regulatory filings, and no subsequent reporting as of May 2026 has indicated the process has moved beyond preliminary exploration. The merger sub could represent genuine deal groundwork or routine legal housekeeping. What it does confirm is that someone inside Musk’s orbit retained advisors to at least sketch the architecture of a combination.
Tesla’s 10-K sharpens the governance debate
Separately, Tesla’s Form 10-K for fiscal year 2025, filed with the Securities and Exchange Commission, included disclosure of the company’s investment in xAI. The FY2024 10-K had already mentioned xAI, but the FY2025 filing provided additional detail: it specifies the timing of the investment, confirms that Tesla’s board reviewed the transaction under its related-party transaction policy, and places the information in the report’s “Other Information” section. Because Musk controls xAI and serves as Tesla’s CEO, the deal required him to sit on both sides of the table, a governance arrangement that has drawn persistent criticism from shareholders and proxy advisory firms like ISS and Glass Lewis.
The 10-K also flags risk factors tied to liquidity, capital spending, and ongoing legal proceedings. For investors already uneasy about Musk’s interlocking roles, the filing cuts two ways: formal board review processes exist, but the related-party transactions keep multiplying. Each new disclosure adds another data point to a pattern that governance watchdogs have flagged for years.
What a combination would actually require
Gerber’s argument carries a straightforward logic. SpaceX, valued at roughly $350 billion in late-2025 private tender offers driven largely by its Starlink satellite broadband business, is one of the most sought-after private companies on the planet. Tesla, trading at a market capitalization that has fluctuated above $800 billion, is already public. If Musk’s attention is going to be divided regardless, Gerber reasons, shareholders should capture the upside from all of his ventures rather than absorbing the distraction without the reward.
The obstacles, however, are formidable. Combining a private company whose valuation rests on opaque secondary-market pricing with a publicly traded automaker and energy company would require reconciling two very different capital structures. Federal regulators would scrutinize Musk’s controlling interest in both entities. The Federal Trade Commission and the Department of Justice have ramped up enforcement against deals involving overlapping ownership, and a transaction of this scale would almost certainly trigger a lengthy antitrust review.
Minority shareholder protections would become a flashpoint. Existing Tesla stockholders would need assurances against dilution, while SpaceX’s private investors, including Founders Fund, Sequoia Capital, and sovereign wealth funds, would negotiate hard on valuation and liquidity terms. The board-level conflicts of interest alone would demand an independent special committee and, likely, a separate fairness opinion for each set of shareholders.
Then there is the strategic question. Tesla builds electric vehicles, battery storage systems, and solar products. SpaceX launches rockets and operates a satellite broadband network. Bulls point to potential synergies in AI compute, autonomous-driving data pipelines, and satellite connectivity for Tesla’s vehicle fleet. Skeptics counter that those links are speculative and that the companies operate in fundamentally different industries with different regulatory regimes, supply chains, and customer bases. Institutional investors would demand a detailed industrial rationale before backing any deal.
The Starlink IPO question
Any merger discussion also has to reckon with the alternative path Musk and SpaceX president Gwynne Shotwell have discussed publicly: taking Starlink public on its own. A standalone Starlink IPO would give SpaceX investors liquidity and a market-set valuation without the complexity of folding a rocket company into an automaker. If Starlink goes public independently, the strategic case for a full Tesla-SpaceX merger weakens considerably, because much of SpaceX’s private-market value is already attributed to the satellite business.
Gerber’s proposal implicitly assumes that a merger is the best way for Tesla shareholders to access SpaceX’s value. A Starlink IPO would offer a cleaner, less contentious route for investors who simply want exposure to the satellite business, though it would not address the broader governance complaint about Musk’s divided attention.
Where the evidence stands as of May 2026
The strongest piece of verified evidence in this story is Tesla’s own SEC filing, an auditable document that any investor can read. The xAI disclosure in the FY2025 10-K establishes a factual baseline for tracking how Musk’s cross-company dealings are governed and whether Tesla’s independent directors are asserting themselves when conflicts arise.
The merger-sub reporting, while suggestive, rests on unnamed sources and a corporate formation whose purpose remains unconfirmed. Gerber’s commentary reflects a real and growing strand of shareholder frustration, but commentary alone does not move corporate machinery. Shareholders who want the board to act would need to organize through formal channels: resolutions, coordinated proxy votes, or direct engagement with independent directors.
The balance of public evidence points to intensifying scrutiny of Musk’s interlocking ventures, not an imminent, board-sanctioned deal. The next decisive signals will surface in proxy statements, amended filings, or a formal Starlink S-1, not on social media.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
