- Elon Musk defended SpaceX’s high valuation by pointing to Tesla‘s growth from a $1.7 billion IPO to over $1.3 trillion today.
- Tesla stock fell 5% Monday on speculation that a future SpaceX equity issuance could be dilutive in a potential merger.
- Analysts and influencers debate the merits of a merger, with one arguing it could add $450 billion in implied value for Tesla shareholders.
- Starlink is highlighted as SpaceX’s primary growth engine, with revenue projected to hit $11.3 billion in 2025.
CEO Elon Musk bolstered the bullish case for SpaceX’s sky-high valuation on Tuesday, pointing to Tesla’s own astronomical rise since its 2010 IPO. His comments came after Tesla shares sold off sharply the prior day, ranking as the second-biggest laggard among the ‘Magnificent Seven’ stocks.
Musk reposted a photo from Tesla’s IPO day, noting on X that “Tesla IPO market cap was 0.1% of its current value.” SpaceX is reportedly preparing for a potentially record-breaking IPO that could seek a valuation of up to $2 trillion. When a user questioned justifying a valuation “over 50X revenue,” Musk’s brief response was “You shall see.”
However, Tesla stock had dropped 5% on Monday to $415.88. The selloff was triggered by an amended SpaceX S-1 filing disclosing the company “may issue a significant amount of equity in connection with future transactions.” This fueled speculation about a potential dilutive merger with Tesla, an idea some institutional investors reportedly hate.
Consequently, Tesla influencer AleXandra Merz argued that a merger-of-equals could boost Tesla’s implied valuation by about $450 billion. Meanwhile, Morningstar highlighted Starlink as the core growth engine, citing 50% revenue growth to $11.3 billion in 2025. Retail sentiment on Stocktwits for TSLA was bearish, while chatter for SpaceX remained bullish amid extremely high message volume.
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