Former Wedbush technology analyst Dan Ives stated that SpaceX is becoming an indispensable artificial intelligence and data infrastructure company, calling Elon Musk’s rocket maker a foundational pillar of the "fourth industrial revolution" despite its volatile start as a publicly traded company. Ives urged investors to judge the company over several years rather than its first weeks following the June IPO, comparing the situation to the early trading periods of Amazon and Facebook.

Speaking with Yahoo Finance’s Brian Sozzi on Thursday, Ives acknowledged that "the valuation support is not there." He emphasized that investors should focus on what SpaceX could become over the next two to five years. Ives, who left Wedbush this month to launch an investment-banking venture, compared the company’s execution challenges to those of other prominent technology listings such as Anthropic and OpenAI, noting that execution is the primary risk and reward factor.

Ives reiterated his view that SpaceX will eventually acquire Tesla Inc., raising the probability of such a transaction to above 80%. "This is essentially Musk," Ives said. "A lot of it is really… betting on Musk." Early SpaceX investor Chamath Palihapitiya supported this view, stating there is "a very obvious industrial logic" to combining SpaceX and Tesla under one capital structure and balance sheet.

Investor Gary Black pushed back against the merger thesis, arguing that Musk’s 82% voting control does not release SpaceX directors from fiduciary duties to all shareholders. Black noted that at current valuations, an all-stock purchase of Tesla could dilute SpaceX holders by roughly 25%. "The math won’t pass muster," he wrote. No transaction has been announced, and any combination would require board review, valuation work, and likely regulatory scrutiny.

The debate precedes Tesla’s second-quarter results report scheduled for July 22 after the closing bell. Wall Street expects earnings of 32 cents per share on revenue of $26.02 billion. SpaceX stock is currently trading about 2.8% lower than its IPO price of $135 per share.

Key Market Expectations for Tesla

Future Fund Managing Director Gary Black pushed back on Thursday against speculation that SpaceX (NASDAQ:SPCX) could acquire Tesla Inc. (NASDAQ:TSLA), arguing that Elon Musk’s voting control does not free the SpaceX board from its fiduciary obligations. Black stated that a deal at current valuations would result in unacceptable dilution for SpaceX shareholders, countering recent support for the merger from venture capitalist Chamath Palihapitiya.

Musk Control Does Not Erase Board Duties

Black emphasized that despite Musk owning 82% of SpaceX’s voting control and 42% of its equity, the board cannot ignore its responsibilities to public shareholders. "Those who think $SPCX will buy $TSLA don’t understand the concept of board fiduciary duty," Black wrote on X. He noted that SpaceX’s prospectus confirms Musk retains the power to elect the board, but this does not "magically let the SPCX board off the fiduciary hook."

Dilution Math Undersells A Tesla Takeover

SpaceX shares traded near $131 on Friday, below the $135 IPO price and significantly lower than post-listing highs. Black argued that using stock to acquire Tesla would require issuing substantial new shares, severely diluting existing SpaceX investors. "At $132 and sinking, SPCX can’t just buy TSLA in a 25% dilutive equity deal," Black said. "The math won’t pass muster."

Conflicting Views on Merger Logic

The debate follows comments from Chamath Palihapitiya, who told CNBC there was "a very obvious industrial logic" to combining the companies under one capital structure. Palihapitiya suggested a merger would facilitate fundraising for Musk’s various projects and estimated Tesla might require a 50% premium in an acquisition due to its volatility and litigation risks. He also highlighted SpaceX’s potential to build a consumer wireless business using spectrum licenses acquired from EchoStar Corp. for about $17 billion.

Wall Street has offered mixed assessments. Jefferies estimated a nil-premium transaction could leave Musk with 55.3% voting control, while JPMorgan called a combination "strategically coherent on paper" regarding AI and robotics integration, though it warned of governance and regulatory hurdles. Conversely, hedge fund manager George Noble criticized the SpaceX IPO as potentially the "largest exit liquidity operation in history," arguing insiders bought at lower prices.

Tesla is scheduled to report second-quarter results on July 22. Wall Street expects earnings of 32 cents per share and revenue of $26.02 billion, following reported vehicle deliveries of 480,126 for the quarter.