Gary Black Thinks Tesla-SpaceX Merger Does Not Make Sense For TSLA Shareholders: Here's Why

Core Viewpoint - A merger between Tesla Inc. and SpaceX does not make mathematical sense for Tesla's shareholders unless significant cost or revenue synergies are identified [2] Financial Implications - Tesla's stock experienced a rally of over 3% following merger speculation, while SpaceX is preparing for a potential public listing with a market cap of $800 billion at a 400x P/E ratio [3][4] - The merger would require Tesla to issue 35% new shares to align with SpaceX's valuation, resulting in a combined market cap of $2.3 trillion, compared to Tesla's current $1.5 trillion at a 200x P/E ratio [4] Shareholder Concerns - Existing institutional shareholders may be hesitant about the uncertainty of profits from space travel and communications, potentially leading to a sell-off of Tesla shares [5] - The dilution of shares by 35% is viewed as excessive given the differing P/E ratios of the two companies [4] Industrial Logic - The rationale for a merger lacks clarity, as it may not address the concerns of Tesla's shareholders despite the operational benefits it could provide to Elon Musk [6] External Opinions - Investor Michael Burry has expressed skepticism about the merger, labeling Musk as a "desperately incentivized futurist" [7]