Tesla stock (NASDAQ: TSLA) extended its decline heading into Friday as investors questioned whether SpaceX could realistically finance a takeover of Elon Musk’s electric-vehicle company.
Tesla fell 0.9% to $391.06 on Thursday, while SpaceX slid 3.1% to $131.11, below its $135 IPO price.
The parallel weakness matters because any acquisition would probably rely heavily on SpaceX stock.
As that currency loses value, the rocket company would need to issue more shares, increasing dilution and making an already complicated transaction harder to justify.
Falling SpaceX shares complicate the takeover arithmetic
Tesla was valued at about $1.4 trillion on Thursday, while SpaceX’s retreat from its post-IPO peak has reduced the purchasing power of its equity.
An all-stock acquisition would require SpaceX to create and distribute a substantial block of new shares to Tesla investors.
Gary Black, managing partner of The Future Fund, estimated that such a deal could dilute existing SpaceX holders by roughly 25%.
“At $132 and sinking, SPCX can’t just buy TSLA in a 25% dilutive equity deal,” Black wrote on X.
Dilution does not mean investors immediately lose one-quarter of their money. It means their ownership would be spread across a much larger share count.
The combined company would therefore need to generate enough additional earnings or strategic value to compensate them.
Black has separately warned that conglomerates often inherit the valuation multiple of their slower-growing component.
Under one scenario, he estimated that combining the companies could erase about $750 billion of equity value unless unusually large revenue or cost synergies emerged.
Also read: SpaceX stock has erased all its IPO gains, but a 76% rally may be brewing
Musk’s control cannot erase governance hurdles
Musk’s influence over both companies could shape discussions around any potential transaction, but it would not eliminate the need for independent scrutiny, shareholder protections and a process designed to address conflicts of interest.
Black argued that SpaceX’s board still owes fiduciary duties to shareholders and could not simply disregard the financial effect of a heavily dilutive acquisition.
The related-party conflict would be obvious.
Musk leads Tesla and controls most SpaceX voting power, placing intense scrutiny on the exchange ratio, valuation assumptions, negotiations and any role assigned to independent directors.
SpaceX’s controlled-company status gives Musk exceptional authority, but it does not make minority investors indifferent to price.
The companies already have growing financial links.
Tesla disclosed that it invested $2 billion in SpaceX common stock in March, representing less than 1% ownership.
It also recognised $87 million of first-quarter revenue from SpaceX purchases of Megapack energy-storage products.
Those links strengthen the industrial argument for closer collaboration across energy and computing.
They also make governance more sensitive, because directors would need to distinguish genuine shareholder benefits from transactions that primarily consolidate Musk’s businesses.
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