Investor Gary Black, who is the managing director of The Future Fund LLC, shared his insights on why a merger between Tesla Inc. (NASDAQ:TSLA) and SpaceX does not make sense for the EV giant's shareholders.



<h2>Does Not Make Mathematical Sense</h2>



In a post on the social media platform X on Sunday, the investor shared that the decision to potentially merge the Elon Musk-led companies did not make &#34;sense mathematically&#34; for Tesla's shareholders unless there were &#34;huge cost or revenue synergies&#34; for the EV maker.



It's worth noting that the news of a merger between the two companies led to a rally of Tesla stock last week, which went up over 3% following reports. It's also worth noting that SpaceX itself is gearing up for a possible public listing in June this year, with Musk hinting at the IPO last November.



&#34;The 35% dilution is just too great given the relative P/E (price to earnings) differences,&#34; he said, then explained that the automaker would need to issue 35% new shares to match SpaceX's &#34;$800B market cap equity at a 400x P/E.&#34; He also noted that Tesla's $1.5 trillion market capitalization was at a 200x P/E ratio, making the combined company’s market cap $2.3 trillion.



&#34;Many existing TSLA institutional shareholders would balk at the uncertainty of 25% profits coming from space travel/communications and sell their shares,&#34; Black said.



<h2>Lack Of Industrial Logic</h2>



The investor further shared his doubts on the merger, saying that the &#34;industrial logic of a TSLA/SpaceX merger escapes me,&#34; adding that despite the merger making it easier for Musk to run the companies as Tesla could &#34;fund SpaceX's negative cash flows,&#34; but it wasn't truly a concern for Tesla's shareholders.



The talks of a merger have also been questioned by &#34;The Big Short&#34; fame investor Michael Burry, who called Musk a &#34;desperately incentivized futurist&#34; in a post on the social media platform X last week.



He then outlined his past predictions about the EV giant, which, according to Black, meant that his claims had &#34;some credibility&#34; and that he knows what he was talking about.



Towards the end of the post, Black highlighted that Tesla had &#34;underperformed Nasdaq for 5 years (TSLA +48% vs NDX +90%), including over the past year (TSLA +12% vs NDX +20%).&#34;



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<blockquote>A $TSLA/SpaceX merger makes no sense mathematically for TSLA shareholders unless there are huge cost or revenue synergies for $TSLA. The 35% dilution is just too great given the relative P/E differences. This is the same reason the idea of a combined enterprise with all of… pic.twitter.com/RpBDmr3egC— Gary Black (@garyblack00) February 1, 2026</blockquote>
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According to Benzinga Edge Rankings, Tesla scores well on the Momentum metric and offers a favorable price trend in the Long term.



Price Action: TSLA had surged 3.32% to $430.41 at market close on Friday, but it slid 0.18% to $429.63 during the after-hours trading.



Check out more of Benzinga’s Future Of Mobility coverage by following this link.



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Investor Gary Black expressed skepticism about a potential merger between Tesla and SpaceX, arguing it lacks mathematical and industrial logic for Tesla shareholders. He highlighted that the merger would require a 35% dilution of shares, which is significant given the differing price-to-earnings ratios of the two companies. Black noted that many institutional shareholders might sell their shares due to the uncertainty of profits from space ventures. He also pointed out Tesla's underperformance compared to the Nasdaq over the past five years. Tesla's stock rose 3.32% recently but fell slightly in after-hours trading.

- Investor Gary Black argues that a merger between Tesla Inc. and SpaceX does not make financial sense for Tesla shareholders due to significant dilution and P/E ratio differences.  
- He notes that Tesla would need to issue 35% new shares to align with SpaceX's market cap, leading to potential shareholder dissatisfaction regarding profits from space ventures.  
- Black also emphasizes that Tesla has underperformed compared to the Nasdaq over the past five years, raising further concerns about the merger's viability.

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Gary Black Thinks Tesla-SpaceX Merger Does Not Make Sense For TSLA Shareholders: Here's Why