Billionaire investor Bill Ackman recently suggested that Elon Musk’s space firm, SpaceX (PC:SPXEX), could go public by merging with Pershing Square SPARC Holdings, which is a special investment vehicle created by Ackman’s firm. In a post on X, he proposed giving Tesla (TSLA) shareholders special rights, called SPARs, that would let them either invest in SpaceX directly or choose to receive cash. This would reward Tesla supporters and make the IPO process more open to everyday investors. The idea also matches Musk’s past comments about letting Tesla supporters own a piece of SpaceX.
Claim 70% Off TipRanks This Holiday Season
- Unlock hedge-fund level data and powerful investing tools for smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential
Interestingly, Ackman outlined the details as follows:
- Tesla shareholders would receive 0.5 SPARs per share, resulting in about 1.723 billion SPARs in total.
- Each SPAR could then be used to buy two shares of SpaceX, resulting in over 3.4 billion shares.
- The SPARC structure is designed to be simple and investor-friendly by removing things like founder stock, underwriting fees, and shareholder warrants, while still offering 100% common stock.
- Pershing Square would also give up its sponsor warrants.
The plan also gives SpaceX a flexible way to raise money. If the SPARs are priced at $11.03 each, the total raised would be around $42 billion, with $38 billion coming from SPAR holders and $4 billion from Pershing Square. If priced higher at $42 per SPAR, the raise could reach nearly $149 billion. In addition, investors who use their SPARs may also receive rights to invest in Musk’s AI company, xAI (PC:XAIIQ), through a second SPARC vehicle. Notably, Ackman’s proposal comes amid reports of a potential SpaceX IPO valued at $1.5 trillion.
What Is the Prediction for TSLA Stock?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 11 Buys, 12 Holds, and nine Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average TSLA price target of $385.34 per share implies 20.7% downside risk.
