This is a scenario tool, not an arbitrage. Tesla owns essentially none of SpaceX today (about 19 million shares, roughly 0.15%), so unlike a holding-company trade there is no built-in discount to capture right now. The entire thesis depends on a merger that has not been announced.

The math: the combined company value is Tesla’s market cap (price times about 3.755 billion shares) plus SpaceX’s market cap (price times about 13.1 billion shares). The merger-terms slider sets what fraction of that combined value Tesla’s existing holders end up owning, and the implied TSLA price is that fraction spread across Tesla’s share count. The Fair value anchor is the split that matches each side’s current market cap, so it lands near today’s price; anything above it means Tesla holders extract a premium, anything below means they get short-changed.

Key risks: Tesla shareholders do not control Tesla (Musk holds about 20% with no super-voting shares), so a deal could be struck on terms that favor the SpaceX side, which Musk fully controls. Synergies are ignored here. SpaceX is not yet profitable on a consolidated basis. And the deal may simply never happen. Prediction-market odds, analyst views (Ives 80-90%, Morningstar 66% to Tesla, Gary Black bearish), and the live quotes all move, so revisit the inputs.