If SpaceX goes public, how much longer can Tesla's "Musk premium" last?

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As SpaceX advances its IPO plans, the unique “Musk premium” long enjoyed by Tesla stock may face challenges. Previously, investors could only participate in Musk’s technological vision indirectly through holding Tesla shares, but SpaceX’s listing could prompt the market to reallocate funds around the “Musk concept.”

According to Bloomberg, SpaceX is planning an internal share sale, with the company’s valuation expected to reach $800 billion, making it the world’s highest-valued unlisted company. Its subsequent IPO could also set a historical record in scale. Analysts point out that the listing of SpaceX may create some capital diversion pressure on Tesla stock, as some Tesla investors actually invest out of recognition for Musk and his vision, rather than for the car business alone.

Notably, Tesla’s stock price has risen nearly 20% in the past month, with a year-to-date increase of over 27%. Currently, Tesla’s forward price-to-earnings ratio (based on expected earnings for the next 12 months) has climbed to about 220 times, ranking second among S&P 500 constituents, just behind Warner Bros.

Investors have mixed views on the impact of SpaceX’s listing. Some believe the new listing will directly divert funds previously concentrated in Tesla; others argue that major milestones achieved by Musk’s companies often create synergy effects, boosting market sentiment and attention for related companies.

Valuation Bubble Raises Doubts

Despite the sustained rise in stock price, Tesla’s fundamentals have raised market concerns. The company faces the dual pressure of slowing sales growth and declining profits, while a tightening regulatory environment and shrinking consumer auto spending present additional challenges. Thomas Thornton, founder of hedge fund Telemetry, stated:

“If you’ve held Tesla stock long-term, you’ve certainly made money, no doubt about that.I just find it strange, because Tesla’s fundamentals are actually very poor.”

Tesla’s current valuation level has sparked widespread skepticism. Vikram Rai, portfolio manager at First New York, said bluntly: “The existing valuation is entirely unsupported by fundamentals.” The company exited its Tesla positions earlier this year.

From a technical standpoint, Tesla’s share price reached the overbought range earlier this week. Looking back at a similar situation in early October, the stock fell about 10% in the seven trading days after hitting that level, which serves as a warning signal for current market dynamics.

The Dual Impact of SpaceX’s Listing

SpaceX’s potential listing is expected to have multiple impacts on Tesla’s stock price. Horizon Investments analyst Dmitry Shlyapnikov said: “SpaceX’s IPO may put some selling pressure on Tesla stock, as some investors hold Tesla primarily to gain exposure to Musk’s vision, rather than for the car business itself.”

However, Adam Sarhan, CEO of 50 Park Investments, holds a different view: “Historical experience shows that when a Musk company achieves an important milestone, it often boosts market sentiment for its affiliated companies.” He expects that a high-profile SpaceX listing could attract more investors drawn to Musk’s innovation narrative into his ecosystem.

Bloomberg Industry Research analyst Steve Man points out that Tesla’s current stock price has already been partly driven by expectations of SpaceX’s listing. The two companies share strategic synergy potential: Tesla’s Optimus robots may support future Mars colonization plans, while SpaceX’s Starlink system could enhance ground vehicle connectivity. Such technological integration expectations further strengthen the perception of the long-term ties between the two companies in the market.

Risk Warning and DisclaimerThe market entails risks, and investment should be approached with caution. This article does not constitute personal investment advice, nor does it take individual users’ specific investment goals, financial circumstances, or needs into account. Users should consider whether any opinions, viewpoints, or conclusions in this article are applicable to their own circumstances. Any investment based on this is at the user’s own risk. ```