TSLA Stock Climbs Premarket: Elon Musk Revives Tesla's IPO-Era Bull Case To Defend SpaceX's $1.8 Trillion Valuation

• Tesla stock fell 5% on Monday after SpaceX disclosed it may issue significant equity in future transactions.
• Tesla influencer AleXandra Merz argued a merger-of-equals could boost Tesla's implied valuation by about $450 billion.
• Morningstar highlighted Starlink as SpaceX's primary growth and cash-generation engine, citing 50% revenue growth to $11.3 billion in 2025.

Tesla shares rose 0.3% in premarket trading on Tuesday as CEO Elon Musk bolstered the bullish case for SpaceX's lofty valuation, pointing to Tesla's rise from a tiny IPO valuation to a $1.3 trillion company.

TSLA stock ended Monday down 5% at $415.88, ranking as the second-biggest laggard in the 'Magnificent Seven' peer group. 

Musk's Bull Case For SpaceX

Musk reposted a photo of himself standing outside the Nasdaq exchange on Tesla's IPO day in 2010. Alongside the image, he highlighted the automaker's growth from its public debut to its current market cap of over $1.3 trillion. "Tesla IPO market cap was 0.1% of its current value," Musk said on X.

SpaceX is preparing for a potentially record-breaking IPO, with reports suggesting the company could seek a valuation of up to $2 trillion and raise as much as $75 billion. 

After Musk’s bullish comments on SpaceX’s valuation, users on X questioned whether the comparison justified SpaceX's valuation, which some critics estimate exceeds 50x revenue. One user challenged Musk, asking: "But how do you justify a valuation that is over 50X revenue for SpaceX, Elon??" Musk's response was brief: "You shall see."

On Monday, Morningstar highlighted Starlink, SpaceX's satellite internet business, as the company's primary growth and cash-generation engine. The firm noted that Starlink's revenue climbed 50% to $11.3 billion in 2025, while operating income rose 58% to more than $4.4 billion. The firm added: “We can see a path to further tens, not necessarily hundreds, of billions of dollars in annual revenue growth in the coming decade, and operating margins potentially exceeding 75%.”

Why Tesla Sold Off On Monday

Musk's comments come a day after Tesla shares suffered a sharp selloff from an amended SpaceX S-1 filing, which disclosed the company "may issue a significant amount of equity in connection with future transactions." The amendment fueled speculation that SpaceX could eventually use stock for acquisitions, investments or other strategic transactions after going public. Gary Black, managing director of The Future Fund, pointed to the filing as a key reason for Tesla's weakness.

In posts on X, Black said that the disclosure "strongly suggests more SPCX equity will be issued" and could potentially be used in a future transaction involving Tesla. Based on his assumptions, he estimated that a SpaceX-Tesla merger could be 28% dilutive since SpaceX currently commands a higher valuation multiple.

Black also said institutional investors remain skeptical of the idea: "Instit'l investors I know hate the idea of a TSLA-SPCX combo because of the dilution," he wrote. "Investors prefer pure plays, and not conglomerates."

Upsides To A TSLA x SPCX Merger

However, Tesla influencer AleXandra Merz, who posts under the handle TeslaBoomerMama on X, recently said that investors misunderstand how merger-of-equals deals are structured. According to Merz, such deals are negotiated around relative fair market values rather than existing market caps. As part of her assumption, the lower-valued company often rises toward the implied transaction value once a deal is announced.

Using a hypothetical example, Merz said that if SpaceX were valued at $2.5 trillion and Tesla at $1.6 trillion, a combined company worth $4.1 trillion with equal ownership could imply a valuation of $2.05 trillion for each shareholder group. That scenario would represent approximately $450 billion in additional value for Tesla shareholders compared with the assumed starting valuation.

Meanwhile, a recent X poll conducted by Tesla influencer Sawyer Merritt showed that a majority of retail investors do not plan to buy SpaceX shares at the IPO.

How Do Retail Traders Feel About TSLA And SpaceX?

On Stocktwits, retail sentiment for TSLA was 'bearish' with 'normal' message volume, while sentiment for SpaceX remained 'bullish' amid 'extremely high' chatter. 

One user said, “$TSLA Probably $360 before SpaceX IPO. After looking into Spacex, I really think all this is going to crash. The IPO and revenue are way too high. Space  stock probably be $700 before we can buy. It will drop bad the following day. Im going to short it”

Another user said, “$TSLA this stock has a way pitching curve balls. Before you know it, we are up $30 and running higher into the spacex ipo”

So far this year, TSLA stock has lagged its “Magnificent Seven” peers, making it the group’s second-worst performer, down 8%. 

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