Betting on a Tesla-SpaceX merger? "Sister Wood's" space ETF makes its first Tesla purchase.

Author: Ye Huiwen, Wall Street Insights

Cathie Wood, a well-known investor, has made her first investment in Tesla through her space exploration-themed ETF, sparking speculation that she is betting on a potential major restructuring of Elon Musk's business empire.

According to Benzinga, the Ark Space & Defense Innovation ETF (ARKX) purchased 35,766 shares of Tesla stock on Wednesday, February 4th. Prior to this transaction, the fund did not hold any Tesla shares. As of Thursday, this holding represented 1.99% of the ETF's total assets.

While Ark Invest, managed by Ms. Mutou, has long held substantial Tesla shares through other innovative funds, this marks the first time it has included Tesla in its space and defense-themed portfolio. This asset allocation adjustment comes at a sensitive time: recent reports indicate that SpaceX and xAI have completed their merger, and market discussions are intensifying regarding Musk's potential further integration of the joint entity with Tesla.

This rare purchase not only drew investors' attention to the lack of public access to SpaceX investments but also sparked speculation about potential capital maneuvers. A merger between Tesla and the SpaceX/xAI entity would involve complex regulatory reviews and shareholder approval processes, and Ark Invest's move may be an attempt to secure a foothold in advance.

Position building logic: betting on mergers or deploying robotics?

There are two main interpretations of ARKX's motivation for this purchase. First, Ark Invest may be accumulating shares in preparation for a potential shareholder vote on whether Tesla will merge with SpaceX/xAI. This purchase is seen by some observers as a direct bet on the consolidation of Musk's business empire.

Secondly, this investment decision may also be based on fundamental logic . The ETF has listed "adaptive robotics" as one of its core investment themes. Given Tesla's significant investment in the Optimus robot and its commitment to using robotics to assist in building "planetary civilizations," this aligns with the macro-vision of the space exploration fund. Therefore, even as an electric vehicle manufacturer, Tesla's potential in robotics provides justification for its inclusion in the space ETF.

Portfolio: ARK's extensive exposure to Musk-related companies

This purchase further solidifies Ark Invest's position as a staunch supporter of Musk's companies. Tesla holds a central position in several of Ark Invest's other ETFs. Specifically, Tesla is the largest holding in the Ark Innovation ETF (ARKK), Ark Next Generation Internet ETF (ARKW), and Ark Autonomous Technology & Robotics ETF (ARKQ), with holdings of approximately 10.99%, 10.39%, and 9.93%, respectively.

In addition, Ark Venture Fund, which invests in private and publicly traded companies, also holds shares in Musk-related companies. Data as of January 31 shows that SpaceX is the fund's largest holding, accounting for 11.23%; xAI is the second largest holding, accounting for 6.31%; and Tesla ranks thirtieth, accounting for 1.05%. These figures do not yet reflect the latest changes following the merger of SpaceX and xAI.

Market View: Rising Consolidation Expectations

Wall Street analysts remain highly focused on the possibility of Musk consolidating his business empire. Investor Chamath Palihapitiya has publicly stated that he believes Musk will eventually complete a "reverse merger," merging SpaceX into Tesla, calling it his "contrarian prediction" for 2026.

Wedbush analyst Dan Ives recently pointed out that the "opportunity" for Tesla to attempt a merger with the newly formed SpaceX/xAI entity is increasing. Ives believes that this growing AI ecosystem will focus on both "space and earth," and Musk not only has the motivation to integrate these forces, but such integration is also logically sound. However, any such merger would require not only approval from Tesla shareholders but also rigorous scrutiny from regulatory agencies.

SpaceX's Capital Path and Investment Scarcity

Currently, SpaceX remains one of the world's largest privately held companies, and the channels for ordinary investors to participate are extremely limited. Aside from funds managed by Ark Invest, investors currently gain exposure to SpaceX primarily indirectly through holding shares in publicly traded companies such as Bank of America, Alphabet, and EchoStar.

Regarding SpaceX's IPO prospects, while Musk has seemingly confirmed the IPO plan, no formal documents have been filed yet. Market speculation suggests a potential IPO could take place as early as June 2026. Against this backdrop, Ark Invest's direct purchase of Tesla through a space ETF, whether driven by optimism about robotics technology or expectations of future mergers, provides a new signal for investors seeking exposure to related assets.