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Gary Black warned that a Tesla-SpaceX merger could erase Tesla shareholders’ premium, while other investors cited strategic and engineering synergies. The article also says the Roadster’s brand impact could outweigh its earnings contribution.
The article
Gary Black Warns Tesla Bulls Against Hyping SpaceX Merger, Says Roadster’s Brand Impact Could Outweigh Earnings Future Fund Managing Partner Gary Black warned Tesla Inc. (NASDAQ:TSLA) investors against hyping a potential merger with Elon Musk’s Space Exploration Technologies Corp. (NASDAQ:SPCX), arguing that arbitrageurs could erase any shareholder premium, even as he acknowledged the new Roadster’s potential to strengthen Tesla’s brand despite its limited financial impact. Black Warns Merger Could Erode Shareholder Premium "$TSLA bulls should stop pumping the TSLA-SPCX deal," Black wrote Thursday on X. $TSLA bulls should stop pumping the TSLA-SPCX deal. Since it will be a stock for stock deal and in such combinations the combined entity should trade at the lower stock’s multiple (here TSLA), any premium paid for $TSLA with $SPCX stock will be whittled away by arbs by the time… — Gary Black (@garyblack00) October 15, 2026 "Since it will be a stock for stock deal and in such combinations the combined entity should trade at the lower stock’s multiple (here TSLA), any premium paid for $TSLA with $SPCX stock will be whittled away by arbs by the time the deal closes," he added. Black’s argument assumes a stock-for-stock transaction and that investors would value the combined company using Tesla’s lower valuation multiple. He previously warned that a merger could reduce Tesla’s valuation by 20%–25%, citing shareholder dilution and a potential conglomerate discount. Read Also: Kimbal Musk Says Tesla Cybercab Is ‘Amazing to Use’ as Driverless Fleet Explodes in Austin and Raises Stakes for Elon Musk’s Robotaxi Bet Black Sees Limited Earnings But Brand Upside In a subsequent X post Friday, Black estimated that the SpaceX-powered Roadster would contribute just $0.06 per share to Tesla’s 2029 earnings, assuming 3,000 annual deliveries and $100,000 profit per vehicle. That represents approximately 1.1% of the $5.40 consensus adjusted earnings-per-share estimate for 2029. $TSLA unveiled its long-awaited revamped Roadster EV last night before an invitation only audience at the SpaceX facility in McGregor TX. The car, which leverages $SPCX thruster and suction technology to fly short distances, will offer promised acceleration from 0-60 in under 1… — Gary Black (@garyblack00) October 16, 2026 However, he argued that the vehicle’s flying capabilities, acceleration and handling could deliver a much larger "halo effect on the Tesla franchise and brand impact." Black maintained his cautious outlook, citing Tesla’s 230-times 2026 price-to-earnings multiple, downward earnings revisions through 2030 and growing competition in autonomous driving. Munster And Barclays Highlight Tesla-SpaceX Merger Potential Barclays analyst Dan Levy recently suggested a merger announcement could arrive before Tesla’s December shareholder meeting, citing opportunities to integrate artificial intelligence (AI) and manufacturing. Investor Ross Gerber argued that a SpaceX acquisition of Tesla "has become obvious" following the Roadster unveiling, although he dismissed its thruster technology as "just for show." Deepwater Asset Management’s Gene Munster similarly interpreted the demonstration as evidence of Musk’s merger ambitions. "It was an engineering flex with no commercial value beyond embarrassing traditional car makers," Munster wrote, adding, "Elon can’t wait to bring $TSLA and $SPCX together." Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Read Also: Elon Musk Opens His Wallet for Ken Paxton, Billionaire Pours $158 Million Into Crucial Texas Senate Race Image via Shutterstock