SpaceX Buying Tesla at Current Valuations Would Not 'Pass Muster,' Gary Black Says as SPCX Retreats From
Musk Control Does Not Erase Board Duties
"Those who think $SPCX will buy $TSLA don't understand the concept of board fiduciary duty," Black wrote on X.
Black put Musk's control at 82% of SpaceX's voting power and 42% of its equity. SpaceX's prospectus shows Musk retained overwhelming voting control, including power to elect the board, while public shareholders have limited influence over corporate decisions.
"That doesn't magically let the SPCX board off the fiduciary hook," Black said.
Dilution Math Undersells A Tesla Takeover
His central objection is dilution. SpaceX shares traded near $131 Friday, below their $135 IPO price and far below their post-listing peak. Buying Tesla with stock would require SpaceX to issue substantial new shares, reducing investors' ownership.
"At $132 and sinking, SPCX can't just buy TSLA in a 25% dilutive equity deal," Black said. "The math won't pass muster."
Wall Street Weighs Merger Logic And Risks
Wall Street has examined the idea. Jefferies estimated that a nil-premium transaction could leave Musk with 55.3% voting control while preserving room to offer Tesla shareholders a premium. JPMorgan called a combination "strategically coherent on paper," pointing to integration across artificial intelligence, robotics, energy, transportation and space, while warning of governance, execution and regulatory complications.
The debate comes before Tesla reports second-quarter results on July 22. According to Benzinga Pro data, Wall Street expects earnings of 32 cents per share and revenue of $26.02 billion. Tesla has already reported 480,126 vehicle deliveries for the quarter.
Price Action: Tesla stock is trading 2.03% lower at $383.30 during pre-market hours on Friday.
Benzinga edge rankings indicate TSLA stock as a Momentum score in the 42nd percentile and a Growth score in the 88th percentile.
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