TSLA Stock Slips Overnight: Analysts Flag Political, Premium Risks To SpaceX Merger — Cathie Wood’s ARK Buys Anyway
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Mark Tepper doubted a Tesla-SpaceX merger would happen, adding that greater political pressure on Musk could bring tougher regulation.
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Cathie Wood’s ARK bought 348,406 SpaceX shares across three ETFs, worth about $47.4 million.
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Jeff Lutz defended Musk’s Texas projects and estimated the state would account for 7% to 12% of SpaceX’s targeted 13-gigawatt compute capacity by the end of 2027.
Shares of Tesla, Inc. (TSLA) slipped nearly 2% overnight heading into Thursday as money managers warned of political hurdles and risks to any takeover premium in a potential SpaceX merger, while Cathie Wood’s ARK Investment Management bought $47 million of SpaceX stock.
TSLA shares fell 3% to $385.19 on Wednesday, bringing the week’s decline to nearly 4%.
Politics Cloud Tesla-SpaceX Merger Hopes
Mark Tepper, CEO of Strategic Wealth Partners, cast doubt on a potential Tesla–SpaceX merger, warning that rising political pressure on Elon Musk could bring tougher regulation for both companies. “I don’t see the SpaceX merger happening. Elon Musk is about to face a lot more political pressure, and that means more regulation,” he said on X.
His warning followed Democrats’ takeover of both chambers of Congress and victory in the Texas governor’s race. Texas hosts major Tesla and SpaceX operations, along with their upcoming Terafab chipmaking project.
XTB research director Kathleen Brooks also warned that increased congressional scrutiny could delay a transaction. “While Congress cannot stop a merger, they could slow it down via extra scrutiny,” she said. Tesla and SpaceX have formed special committees to study a possible merger.
Black Warns Merger Premium Could Vanish
Gary Black, managing partner of The Future Fund, warned that an all-stock SpaceX-Tesla deal might deliver less value than bulls expect, pointing to Marvell Technology’s (MRVL) acquisition of Lumentum Holdings (LITE).
“As we’ve learned (again) from $MRVL – $LITE deal, a +24% premium can quickly go negative as the acquirer’s stock is sold down,” he said on X. Black cited declines of 27% in Lumentum and 31% in Marvell from their pre-announcement levels. Earlier this week, he highlighted Lumentum’s 15% slide to $750 as Marvell fell 26% following deal rumors.
Marvell’s initial offer promised 4.5 shares for each Lumentum share, worth about $1,132, a 24% premium to Lumentum’s Oct. 28 closing price. But the fixed exchange ratio means the offer’s dollar value falls alongside Marvell’s stock.
With the deal expected to close in the first half of 2028, Black warned that Tesla investors could face a similarly lengthy wait. “A SPCX-TSLA deal given its size and complexity could take just as long,” he said earlier this week.
Cathie Wood’s ARK Buys Into SpaceX Weakness
Meanwhile, Cathie Wood’s ARK Investment Management bought 348,406 SpaceX shares on Wednesday, worth about $47.4 million.
The ARK Innovation ETF (ARKK) led the purchases with 224,483 shares, followed by the ARK Autonomous Technology & Robotics ETF (ARKQ) with 63,478 and the ARK Next Generation Technology ETF (ARKW) with 60,445.
Lutz Pushes Back On Texas Fears
Meanwhile, former manufacturing and supply-chain executive Jeff Lutz pushed back on concerns about Musk’s Texas projects, pointing to local approvals and economic benefits. “Every Tesla and SpaceX project went through the normal local hearings and permitting processes,” he said.
Lutz estimated that Texas would account for 7% to 12% of SpaceX’s 13 gigawatts of computing capacity by the end of 2027. Musk outlined the 13-gigawatt target during last month’s earnings call. SpaceX reported 1.7 gigawatts of nameplate compute capacity as of Sept. 30.
The projects have still faced local resistance. Grimes County commissioners approved Terafab’s reinvestment zone and tax incentives in June despite residents’ concerns about transparency, environmental effects, and changes to the area.
On Stocktwits, retail sentiment for TSLA slipped further to ‘extremely bearish’ from ‘bearish’ levels a week ago amid a 107% surge in 24-hour message volumes.
One bearish user said, “$TSLA There will be negative headlines involving Elon soon. Investigations and so forth. And if we’ve learned anything on how trading algos react to negative news, imagine how it will act on a red day in the market.”
Another user said, “$TSLA no merger under blue wave”
So far this year, Tesla’s stock has lagged its “Magnificent Seven” peers, making it the group’s worst performer, down about 14%.
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Deepti Sri has no position in any of the stocks mentioned in this article. StockTwits’ news team content is for informational purposes only and is not intended as investment advice. For more, see our editorial policy. This article was originally published on StockTwits.
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