Tesla-SpaceX merger is 'not so easy': Analyst

Wall Street chatter about a possible merger between rocket maker SpaceX ( SPCX ) and EV giant Tesla ( TSLA ) has been increasing in recent weeks, with speculation about what such a deal would look like.

"It's not so easy. Basically, SpaceX would have to acquire Tesla. We think it'd be an all-stock deal," Tom Narayan, RBC Capital Markets lead equity analyst, told Yahoo Finance.

Currently, CEO Elon Musk controls 85% of SpaceX voting rights and 20% for Tesla.

"There would have to be a pretty strong premium in order to acquire Tesla," Narayan said. "We think something like a $480 stock price for Tesla; it's our price target."

Wall Street has been speculating about the merger, given synergies between SpaceX's involvement in AI, satellites, and data centers and Tesla's robotaxis and humanoid-robot initiatives.

Narayan noted the longer-term play may focus on Terafab — Elon Musk's ambitious semiconductor initiative aimed at bringing chip manufacturing in-house and reducing production costs by up to 90%.

"This is their way of bypassing Nvidia and bypassing TSMC," Narayn said. "If they can do that, it's huge."

Tesla is coming off the jaw-dropping unveiling of its Roadster EV last week.

Shares of the EV maker are down roughly 18% year to date, trading near $367 on Monday.

SpaceX went public in a blockbuster IPO this past June, pricing shares at $135 before they opened at $150.

On Monday, SpaceX stock was trading near $148.

Ines Ferre is a senior business reporter for Yahoo Finance.