Polymarket's contract on a Tesla-SpaceX merger announcement by the end of 2027 rose to 67.5 cents from 64 cents, while the 2026 contract held at 19.5 cents. The market now prices most of the merger probability in the later year.
Tesla gave merger traders nothing to work with on Wednesday. The company said it "will not be addressing any questions today on a potential merger with SpaceX" on its third-quarter call. Elon Musk said, "I feel like I'm tap-dancing through a minefield."
The prediction markets' reaction is easiest to read in two parts: before the results and after.
Two contracts, two answers
Polymarket's contract on whether a Tesla-SpaceX merger is officially announced by Dec. 31, 2026, was 19.5 cents at 2 p.m. Wednesday and 19.5 cents at 5:33 a.m. Thursday, with a range of 18.5 to 20.5 cents. The contract for an announcement by Dec. 31, 2027, rose from 64 cents to 67.5 cents, after printing 71.5 cents at 4 p.m., before the results were released.
The difference between the two prices is the market's estimate of the chance that a deal is announced in 2027 but not this year: about 48 percentage points. Traders see a merger as more likely than not, but not soon.
That matches what is publicly known. Musk said on SpaceX's call on Tuesday that both companies have formed special committees of independent directors to study a combination, and that the committees have not agreed on any terms and may not. A process that has just begun, with two boards and shareholder approval reportedly required, points toward a long timeline.
The stock and the contract after the results
Tesla shares closed Wednesday at $386.47, up 3.4%, and were indicated about 5.3% lower at 5:33 a.m. Thursday after results that showed operating income down 56% and a cut to capital spending. Over Wednesday afternoon the 2027 contract and the stock both rose. After the results, both fell: the contract eased to 67.5 cents from its 71.5-cent pre-results print, and the shares slid in premarket trading. The contract still ended above where it started the afternoon.
A caution on depth
These are thin markets. Liquidity was about $34,000 on the 2026 contract and about $22,000 on the 2027 contract. A few trades can move the price by several cents, and the 4 p.m. jump in the 2027 contract came with no identifiable news.
What to watch
Any filing from either company naming the committee members, advisers or mandate; Tesla's annual meeting; and whether the 2026 contract moves at all before year-end, which would be the first sign the timeline is shortening.