JPMorgan Chase: The potential obstacles to a merger between Tesla and SpaceX are underestimated.

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Deep Tide TechFlow message: On July 08, JPMorgan analyst Rajat Gupta said that although the merger of Tesla and SpaceX “looks reasonable on paper,” current speculation about the merger has underestimated the potential obstacles that could hinder the deal. Potential obstacles include multi-jurisdictional regulatory approvals; symmetry in governance and voting rights; and the view that “the outside world would regard the merger as a SpaceX-led acquisition rather than a merger of equals.”

He added: “Overall, we will focus on SpaceX’s acquisition currency, the regulatory landscape, and Musk’s voting power in Tesla, as catalysts as a potential merger gets closer.” JPMorgan said that if a deal occurs, the most likely structure would be a SpaceX-led, all-stock acquisition of Tesla. (Jin Shi)

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