SpaceX Buying Tesla at Current Valuations Would Not ‘Pass Muster,’ Gary Black Says as SPCX Retreats From Post-IPO Highs
Future Fund Managing Director Gary Black dismissed speculation that SpaceX could acquire Tesla, citing fiduciary duties and dilution risks. He argued that Elon Musk's voting control does not exempt the board from obligations and that a stock-based deal would be too dilutive for shareholders. This follows comments by Chamath Palihapitiya suggesting industrial logic for a merger, while Wall Street analysts note strategic coherence but warn of governance and regulatory hurdles.
Future Fund Managing Director Gary Black pushed back on Thursday against speculation that SpaceX (NASDAQ:SPCX) could acquire Tesla Inc. (NASDAQ:TSLA), arguing that Elon Musk’s voting control does not free the SpaceX board from its obligations.
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.
Those who think $SPCX will buy $TSLA don’t understand the concept of board fiduciary duty. Sure, Elon owns 82% of the SPCX voting control (and 42% of overall SPCX equity) but that doesn’t magically let the SPCX board off the fiduciary hook. At $132 and sinking, SPCX can’t just…
— Gary Black (@garyblack00) July 16, 2026
"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."
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No acquisition has been announced. Black’s warning followed comments from early SpaceX investor Chamath Palihapitiya, who told CNBC there was "a very obvious industrial logic" to putting both companies under "one capital structure" and "one balance sheet."
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.
A merger would confront different views of SpaceX’s valuation. Hedge fund manager George Noble, a former assistant to Fidelity investor Peter Lynch, wrote that "the largest IPO in history is also shaping up to be the largest exit liquidity operation in history." He argued that insiders bought at far lower prices and could eventually sell into public demand.
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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