Tesla Stock Gains as Musk Exercises $116B Pay Package, June 18

Elon Musk exercised his full 2018 Tesla pay package on June 16, 2026, acquiring 303.96 million shares for a paper gain of $116 billion. The transaction marks one of the largest equity events in corporate history. Meanwhile, Wall Street is intensely debating whether a Tesla-SpaceX merger could happen within 12 months, with analyst opinions sharply divided on timing and strategic fit.

How Musk’s Exercise Deal Worked

Musk exercised options on 303.96 million shares at a strike price of $23.34 per share. Tesla closed at $404.66 on June 16, creating a spread of $381.32 per share. The total paper gain came to roughly $115.9 billion. Musk did not pay cash for the exercise. Instead, Tesla withheld 17.53 million shares worth $7.1 billion to cover the $7.1 billion exercise cost through net settlement. Musk received 286.43 million net new shares, but they are restricted and cannot be sold until January 19, 2028.

Merger Talk Intensifies After SpaceX IPO

SpaceX went public on June 13, 2026, in the largest IPO in market history, priced at $135 per share and debuting at a $1.77 trillion valuation. The offering has triggered fresh merger speculation. Wedbush analyst Dan Ives put the odds of a Tesla-SpaceX merger within the next year at 80%. However, Oppenheimer analysts pushed back, arguing that keeping the two companies separate better supports Musk’s long-term AI ambitions and that having two public currencies gives him more flexible access to capital.

Analyst Forecasts Diverge on Deal Timing

Oppenheimer acknowledged a merger remains plausible but does not expect one in the near term. Instead, the firm expects supply chain synergies to expand between Tesla and SpaceX in energy storage, servers, and data infrastructure. Oppenheimer raised Tesla’s energy storage sales forecasts by 2% for the rest of 2026 and 3% for 2027 and 2028. On vehicles, Oppenheimer increased forecasts by 4% across 2026-2028, citing elevated oil prices that improve the total cost of ownership for electric vehicles. The firm remains cautious on autonomous driving and humanoid robot timelines, pointing to FSD V15 as the next key milestone.

What This Means for Tesla Investors

Tesla shares trade around $410 this week, holding most gains since a late-April low. The merger narrative adds a new layer to Tesla’s bull case, which already includes full self-driving, robotaxis, and Optimus robotics. With Wedbush seeing 80% odds of a merger within 12 months and Oppenheimer expecting near-term synergies, the data points to near-term upside from supply chain benefits and longer-term optionality from a potential combination. However, regulatory approval and shareholder votes would be required for any deal.

Final Thoughts

Musk’s $116 billion equity exercise signals confidence in Tesla’s future, while SpaceX’s IPO has made a merger tangible rather than theoretical. With analyst views split on timing, Tesla investors face both near-term synergy upside and longer-term merger optionality.

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