Venture capitalist Chamath Palihapitiya said on Tuesday that investors are overlooking a major near-term value driver for SpaceX (NASDAQ:SPCX), arguing that Elon Musk could create strategic and financial leverage by combining the space venture and Tesla Inc. (NASDAQ:TSLA) under one corporate structure.
Palihapitiya Sees Clear Tesla Deal Logic
Appearing on CNBC’s "Squawk Box," the All-In podcast co-host said he sees "a very obvious industrial logic to put these two businesses together, to have one capital structure, to have one balance sheet, to be able to raise money for the broad swath of things that he’s doing as one vehicle."
Palihapitiya said a Tesla deal would face unusual scrutiny because Musk has drawn repeated shareholder lawsuits. Asked what SpaceX might need to pay, he said a typical business might receive a 20% to 30% premium, but Tesla would likely require more "because of the volatility of Tesla and the number of shareholder lawsuits that may come up no matter what. I mean, if he eats a sandwich the wrong way, he unfortunately gets sued. So, it’s probably a 50% premium."
No such deal has been announced, and any transaction between Musk-led companies would be subject to review by independent directors and regulators.
Starlink Spectrum Could Power Mobile Push
Palihapitiya also said SpaceX could unlock a large consumer wireless business through Starlink. SpaceX last year agreed to buy EchoStar Corp. (NASDAQ:SATS) spectrum licenses for about $17 billion, a deal meant to expand Starlink’s direct-to-cell service.
"The spectrum he bought from Charlie Ergen, I think, is going to get lit up. This is just me speculating," Palihapitiya said.
Rather than relying only on traditional phone makers or carriers, he said Musk could go straight to consumers and say, "I gave you internet access. I would like to give you an incredible new mobile phone service. It’s integrated with all of these other services that you need. Would you like it? From AI to payments to how your car works, all of it."
"When you look at SpaceX, it has all of the infrastructure plus its own AI," he added. "If you look at the mobile carriers, they’re missing a lot."
AI Concerns And California Taxes Surface
Palihapitiya also discussed International Business Machines Corp.’s (NYSE:IBM) stock drop and warned that AI spending may be outpacing productivity gains, saying, "I think you’re starting to see a little bit of the wheels come off."
He also said he would remain in California and "pay the taxes" despite a proposed 5% one-time wealth tax on billionaires. "It’s given me everything. So, I will not leave and I will keep building companies there and hiring people there," he said.
Palihapitiya has repeatedly backed Musk’s companies since SpaceX went public and has compared the SpaceX IPO to a 529-year-old economic turning point, calling SpaceX the public-market pick with the "most broad optionality," and has floated an "Elon Corp" consolidation of Tesla and SpaceX.
Image via Shutterstock
Login to comment