A merger between Tesla Inc. (NASDAQ:TSLA) and SpaceX could reportedly trigger Elon Musk‘s $1 trillion Tesla pay package without the EV giant having to reach any operational milestones.
$1 Trillion Package Kicks In With Merger?
The package, which features operational milestones like 10 million active FSD subscriptions, 1 million Tesla robotaxis on the road, and Tesla delivering over 1 million robots by 2035 among others. However, an Electrek report on Sunday showed that the milestones would be voided in the event of a “Change in Control.”
The report pointed to the “Change In Control” section of the contract, which stipulates that “in the event of a Change in Control, the Operational Milestones shall be disregarded,” and that only the market capitalization would be considered for the award.
The change in control clause could point towards a potential merger/buyout of the EV giant, which could take place as talks of a possible merger with SpaceX have been in the headlines in the past.
SpaceX IPO
The news comes as SpaceX’s IPO, set to take place in the coming weeks, could trigger automatic investment from retirement funds, including 401(k) accounts.
The automatic buying would happen as index funds investing in indices like the S&P 500 and the Nasdaq 100 would be buying into the IPO amid rule changes adopted by both indices that allow SpaceX to be considered for an expedited listing and be granted waivers from profitability rules, among other things.
Reports had also emerged that SpaceX would be trimming down its targeted valuation amid the IPO to $1.8 trillion. However, that was denied by Musk.
According to Benzinga Edge Rankings, Tesla scores well on the Growth and Quality metric, while also providing a favorable price trend in the Short, Medium and Long term.
Price Action: Tesla shares were down 1.37% to $429.81 during premarket trading on Monday.
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