In a SpaceX-Tesla Merger, Tesla Shareholders Might Be the Junior Partner

Elon Musk is the chief executive officer of both Tesla (NASDAQ: TSLA) and Space Exploration Technologies (NASDAQ: SPCX), but that doesn't mean the two companies are equals. If they eventually merge, Tesla shareholders might discover they're not holding the stronger hand, even though Tesla has been publicly traded much longer than SpaceX.

Both companies have formed independent committees to explore a potential merger, raising the possibility of creating a technology giant worth roughly $3.5 trillion. Musk has endorsed the idea, although he isn't participating in negotiations because of his ownership interests in both businesses.

There's plenty of logic in combining the companies, particularly since both are pouring billions of dollars into artificial intelligence (AI). But here's an interesting wrinkle: Tesla generates nearly twice as much revenue as SpaceX, yet SpaceX commands the higher market valuation.

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