Tesla jumps as Bloomberg reports SpaceX merger could come by December

Why did Tesla stock rise on Thursday?

Tesla (Nasdaq: TSLA) shares rose 1.7% on Thursday to close at $397.45. The trigger was a Bloomberg News report that Tesla and SpaceX are moving toward a merger.

Why it matters: Bloomberg said Elon Musk is pushing for the deal. It said a combination would be the biggest corporate merger ever. Citing people familiar with the talks, it said an announcement could come around Tesla's annual shareholder meeting on Dec. 3. Bloomberg added that the timing could slip into early 2027.

By the numbers: The gain added $26 billion to Tesla's market value. The stock is up 16% since the Nov. 5 close, its strongest short run in more than a year.

What did SpaceX stock do?

SpaceX shares barely moved during regular hours. They edged up 0.1% to close at $139.94. After the closing bell, they rose 1.4% to $141.96.

After-hours trading happens once the regular session ends. Far fewer buyers and sellers take part, so a handful of orders can move prices more. Those moves can shrink or reverse when the full market reopens.

Tesla also rose 0.6% after hours to $399.85. SpaceX is valued at $1.9 trillion, more than Tesla's $1.6 trillion. Traders swapped $13 billion of SpaceX stock during the day, slightly more than the $12 billion that changed hands in Tesla.

What is still unsettled in the talks?

Each company's board has a special committee handling the talks, Bloomberg reported. Those committees are still working out how a combined company would be set up and run. They are also settling the rate at which one company's stock would be swapped for the other's.

That swap rate is the open question for anyone who owns either stock. It could decide how much of the combined company each group of shareholders ends up holding.

Bloomberg's account rests on people familiar with the talks. It also said the timing could slip. No terms have been announced. Even after the rally, Tesla closed 18.9% below its 52-week high of $489.88, the highest price of the past year.

How did the broader market do while Tesla rose?

Tesla's gain did not carry the market. The S&P 500 fell 0.4% and the Nasdaq-100 fell 0.3%. Only 242 stocks rose, against 825 that fell.

The consumer discretionary sector fund, an ETF that counts Tesla among its top holdings, fell 0.4%. On the same day, the 10-year Treasury yield jumped 12 basis points to 5.10%.

What could come next for the merger talks?

What’s next: The next date tied to the deal is Tesla's annual shareholder meeting on Dec. 3, which Bloomberg linked to a possible announcement. For the wider market, the Federal Reserve's rate decision follows on Dec. 9 at 2 p.m. ET.