TSLA Stock Slips Overnight: Gary Black Says SpaceX Can't Afford Tesla - 'The Math Won't Pass Muster'

• Black warned a Tesla deal could dilute SPCX shareholders by about 25%.

• Chamath, Jefferies and JPMorgan still see strategic logic in a Tesla-SpaceX combination.

• Tesla reports Q2 earnings on July 22, with EPS of $0.32 expected.

Shares of Tesla, Inc. (TSLA) slid 2% overnight heading into Friday as Future Fund Managing Director Gary Black pushed back against growing speculation that SpaceX could acquire the EV giant.

TSLA stock slipped 1% on Thursday to $391.06, logging its second consecutive session in the red.

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Tesla Bull Gary Black Says SpaceX Deal Does Not Add Up

Black said that CEO Elon Musk's control of SpaceX prevents its board from ignoring the financial impact of a heavily dilutive deal. "Those who think $SPCX will buy $TSLA don't understand the concept of board fiduciary duty," Black said on X. Musk controls 82% of SpaceX's voting power and owns 42% of its overall equity. However, he said that the control does not remove the board's obligation to act in the interests of SpaceX shareholders.

The key problem, he said, is dilution. With SPCX trading at about $132 and continuing to fall, an equity-funded Tesla acquisition would require SpaceX to issue a large amount of new stock: "At $132 and sinking, SPCX can't just buy TSLA in a 25% dilutive equity deal," Black said. "The math won't pass muster."

Why The Tesla-SpaceX Merger Debate Is Heating Up

Black's warning comes days after early SpaceX investor Chamath Palihapitiya revived the merger debate, saying there is "a very obvious industrial logic" to combining Tesla and SpaceX under one capital structure and balance sheet.

Palihapitiya previously said that SpaceX was more likely to reverse-merge into Tesla than pursue a traditional IPO, allowing Musk to place his "two seminal assets into one cap table." He also called SpaceX "the outlier of outliers" and said its direct-to-cell business could become "an enormous business" before several other revenue streams mature.

Meanwhile, Jefferies said a merger could make strategic sense, estimating that a nil-premium deal could leave Musk with 55.3% voting control while still allowing a premium for Tesla shareholders. JPMorgan similarly called the idea "strategically coherent on paper," citing links across AI, robotics, energy, transportation and space.

TSLA Earnings Ahead: Q2 Preview

The merger debate comes ahead of Tesla's second-quarter earnings on July 22, with Wall Street expecting EPS of $0.32 on revenue of $26.02 billion.