RE: LeoThread 2025-12-23 01-03

It still seems likely Elon will lean toward Morgan Stanley given the firm’s long history of support for his companies

Previously mentioned a similar idea: if any company goes public, priority would be given to longtime shareholders of other companies, including Tesla. Loyalty deserves loyalty

Here’s the proposal in plain terms

1. Merge SpaceX with Pershing Square’s SPARC, a new form of acquisition company approved by the SEC — a variant on a SPAC that aims to speed a public listing

1. Issue SPARC special purpose acquisition rights (SPARs) to Tesla shareholders so each SPAR gives the right to buy SpaceX shares at a fixed price, or to be sold for cash to someone else — effectively giving loyal Tesla shareholders first access to SpaceX equity

1. Exercising SPARs would also grant rights to invest in xAI and other private ventures at a later date; Pershing Square would perform due diligence for all investors and commit $4 billion at a fixed per-share price

1. No underwriting fees, no founder stock or sponsor warrants, and no dilutive securities from the sponsor; SpaceX would incur minimal transaction costs, covered largely by SPARC

1. Capital raised can be scaled by changing the SPAR exercise price — examples given: setting exercise at $11.03 would raise about $42.0 billion ($38B from SPARs plus $4B from Pershing Square); setting it at $42.00 would raise about $148.7 billion ($144.7B from SPARs plus $4B).

Assumptions: 0.5 SPARs per Tesla share → 1.723 billion SPARs outstanding (including 61.1M already outstanding), with each SPAR exercisable for two SpaceX shares → 3.446 billion SpaceX shares exercisable

1. SPARC would be indifferent to primary vs secondary share allocation, offering maximum flexibility; due diligence and a definitive agreement could be completed in 45 days, making the transaction certain subject only to SEC approval, and not contingent on market conditions

A few practical advantages: faster timeline, lower fees, shareholder loyalty rewarded, and flexible capital sizing. But structure alone may not determine a deal of this scale

Morgan Stanley’s track record with Elon’s ventures over the years:

1. Tesla IPO (2010) — helped take Tesla public and raised initial public capital
2. Tesla secondary offering (2013) — acted as a major underwriter to raise growth capital during early production scaling
3. Convertible notes (2014) — structured roughly $2.3B in convertible debt for factory and R&D expansion
4. Senior notes (2017) — assisted in raising about $1.8B in high-yield debt to fund Model 3 production ramp
5. Secondary offering (2020) — helped raise $2.3B to strengthen the balance sheet before macro uncertainty
6. Twitter/𝕏 (2022) — served as lead financial advisor, structuring and syndicating ~$13B of acquisition debt within a ~$44B transaction, coordinating complex financing across lenders

Bottom line: Ackman’s SPARC approach is clever, efficient, and shareholder-friendly on paper — it reduces fees, rewards loyalty, and moves quickly.

Still, history and longstanding support from a firm like Morgan Stanley will likely be a major factor in deciding how a transaction of this magnitude gets executed