TSLA Stock Climbs Overnight: ‘SPAC King’ Chamath Palihapitiya Sees ‘Obvious’ Logic In Tesla-SpaceX Merger

• Palihapitiya said there was “very obvious industrial logic” in putting the two companies under one structure.
• He had previously predicted that SpaceX could reverse merge into Tesla rather than pursue a traditional IPO.
• Palihapitiya called SpaceX an “incredible company” and “the outlier of outliers.”

Shares of Tesla, Inc. (TSLA) climbed 0.4% overnight late Tuesday after billionaire investor Chamath Palihapitiya said there was “very obvious industrial logic” in combining the electric-vehicle maker with Elon Musk’s SpaceX.

TSLA stock rose 0.4% on Tuesday, ending the session at $396.18. 

Chamath Backs Tesla-SpaceX Merger

Speaking in a CNBC interview, Palihapitiya — an early SpaceX investor often dubbed the “SPAC King”— said that investors may be underestimating the near-term value of a potential combination. The remarks come after he said in March that SpaceX was more likely to reverse-merge into Tesla than to pursue a traditional initial public offering. At the time, he said Musk could consolidate his “two seminal assets into one cap table.”

Reiterating that view, Palihapitiya said now that there is “a very obvious industrial logic” to combining Tesla and SpaceX. “There is a very obvious industrial logic to put these two businesses together, to have one capital structure, to have one balance sheet, to be able to raise money for the broad swath of things that he's doing as one vehicle,” he said.

Palihapitiya, who said he invested in SpaceX through Peter Thiel’s Founders Fund and was an investor in satellite communications company Swarm before its acquisition by SpaceX, called the aerospace company “an incredible company” and “the outlier of outliers.”

Beyond a potential merger, Palihapitiya highlighted SpaceX’s direct-to-cell business as another underappreciated growth driver: “I think that you're going to see an enormous business in the domestic cellular market before you see a lot of other revenue streams hit,” he said. 

Wall Street Weighs Tesla-SpaceX Merger

Palihapitiya’s remarks come as the Tesla-SpaceX merger debate moves beyond retail speculation and into Wall Street research. Jefferies also recently said that a merger carries strategic logic, estimating that a nil-premium deal could leave Elon Musk with 55.3% voting control while still allowing room for a premium to Tesla shareholders.

JPMorgan similarly called the idea “strategically coherent on paper,” citing potential links across AI, robotics, energy, transportation and space, while flagging governance and execution risks.

The merger talks also come ahead of Tesla’s second-quarter earnings on July 22, with Wall Street expecting earnings per share (EPS) of $0.32 and revenue of $26.02 billion. 

Jefferies raised its TSLA price target to $400 from $375 and maintained a ‘Hold’ rating after Tesla delivered 480,100 vehicles in the quarter, well above estimates. The firm said that stronger demand in China and Europe suggested Tesla’s prolonged growth and earnings slowdown may be reversing. It also raised its second-quarter earnings before interest and taxes (EBIT) forecast to $1.45 billion, though it remained cautious about potential delays in the Cybercab ramp.

How Do Retail Traders Feel About TSLA?

On Stocktwits, retail sentiment for TSLA has been ‘bullish’ for a month amid ‘normal’ message volume.

One user said, “$TSLA $450 earnings. for now $400-$405”

Another user said, “$TSLA probably just chops around $400 until earnings next Wednesday 7/22 it’s a buy the rumor sell the news stock so if it does get bid up into the report it’ll likely fade the entire move back down after earnings is released or when Elon starts talking.”

So far this year, Tesla's stock has lagged its "Magnificent Seven" peers, making it the group's second-worst performer, down about 12%. 

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