Key Takeaways
- Gary Black predicts SpaceX will announce an all-stock deal to buy Tesla for $420 a share in the next few weeks, about 18% above Tesla’s $354.72 close on Oct. 16.
- Tesla’s own earnings can’t support that price, so the bid’s value would rest on SpaceX’s stock and growth.
- Analysts expect SpaceX’s revenue to grow from $45.3 billion in 2026 to $201 billion in 2028, while Tesla trades at 182x forward earnings.
- The date and price are Black’s guess, and Tesla’s third-quarter results on Wednesday are the next thing to watch.
Tesla (TSLA) showed off a Roadster with thrusters last Thursday night, and investors mostly shrugged.
Gary Black of The Future Fund called the stock’s reaction “the definition of market indifference.” He argued that investors “won’t care about a niche product 2-3 years out.”
Then he posted on X what he thinks the event was really for:
“I agree with those who say the sole purpose of last night’s Roadster event was to make the case for a $SPCX-$TSLA merger. My guess: Announcement in next few weeks $SPCX buys $TSLA for $420/share in SPCX stock; deal could take a year to close.”
Merger chatter doesn’t get much more specific than that.
Black has company
Musk biographer Walter Isaacson saw the same thing on TBPN. He called the Roadster “almost a joint product” of Tesla and SpaceX (SPCX), right down to “the way the thrusters and the rockets work.”
“I think it shows why eventually, and I would guess, Tesla and SpaceX are gonna merge,” he said.
Peter Diamandis went further on his Moonshots podcast the next day: “My prediction is they’re going to announce the merger before the end of the year.”
So Isaacson says “eventually,” Diamandis says by December, and Black says within weeks, at a set price.
$420 is an 18% premium
Tesla closed at $354.72 on Friday, Oct. 16. Black’s $420 is about 18% above that. For holders who have watched the stock fall 21% this year, that would be a welcome exit.
The sticking point is what $420 would buy. Tesla already sits at a rich multiple of its own earnings, near the top of its three-year range…
That 182x compares with a three-year average of 135x and a low of 52x in April 2024. At $420, the multiple would be closer to 215x, still under the 243x peak from last December.
The earnings behind that multiple have shrunk. Normalized EPS fell from $3.12 in 2023 to $1.66 in 2025, and analysts expect only $1.74 for 2026 before a climb to $3.21 in 2028…
Even on those 2028 estimates, $420 works out to roughly 131x earnings.
That’s why Black himself still says he’s cautious on Tesla. He points to its “stretched” valuation and adds that “autonomous tech continues to commoditize.”
The floor would be built on SpaceX stock
This is also why a SpaceX bid matters so much to Tesla holders. In an all-stock deal, the $420 arrives as SpaceX shares, so whatever floor the bid puts under Tesla rests on SpaceX’s growth, which has little to do with car margins.
And analysts expect a lot of it…
Consensus has SpaceX’s revenue rising from $45.3 billion in 2026 to $117 billion in 2027 and $201 billion in 2028. That’s more than 4x in two years, the kind of growth Tesla’s car business hasn’t shown since its EPS peaked in 2023.
There’s a catch. With the price paid in stock, the bid’s value would move with SpaceX’s share price until closing, and Black thinks closing could take a year.
A good outcome, but don’t bet on the date
I think Black is probably right that a merger is where this ends up, since three well-connected Musk watchers read the Roadster the same way. A $420 bid in SpaceX stock would also be a good result for Tesla holders, because it swaps 182x car earnings for a stake in SpaceX’s growth.
Still, I wouldn’t buy Tesla at $355 on the hope of “the next few weeks.” Neither company has announced anything, and if no bid arrives, you’re holding a stock at 182x earnings that analysts don’t see getting back to its 2023 level until 2028.
Tesla reports third-quarter results Wednesday afternoon, and any word from management about SpaceX on that call will matter more to the stock than the quarter itself.
So what is Tesla stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
