Tesla shares fell 4% on Wednesday to $381.59 as Wall Street and retail investors shifted attention to SpaceX’s blockbuster IPO, leaving the electric-car maker on track for a second consecutive week in the red.
The move coincided with reports that SpaceX’s offering attracted more than $250 billion in demand — better than four times the shares on offer — for 555.6 million shares priced at $135 each. The company is asking to raise $75 billion and would be valued at about $1.8 trillion in the deal, figures that help explain why cash was pulled from other parts of the market.
One market voice spotlit the rotation. Gary Black posted that many retail investors buying SPCX this week will lighten up on their TSLA positions to fund those SpaceX purchases, and he said lead banks Goldman Sachs and Morgan Stanley are likely to engineer a Day 1 pop for IPO investors. That combination — a crowded offer and the expectation of an immediate gain — created a clear, dateable pressure point for Tesla stock on Wednesday.
Black also warned that the valuation is rich. He framed SpaceX’s suggested price as roughly 300 times an estimated 2025 EBITDA and about 120 times a projected 2026 EBITDA of $15 billion, and said he would wait for the stock to “come back to earth” after the IPO before buying. His view undercuts the chase mentality: he expects short-term upside for new shareholders while urging caution for longer-term buyers.
The financial links between the two companies complicate the picture. Tesla already owns 19 million SpaceX shares, and Tesla is mentioned 87 times in SpaceX’s S-1 filing. Analysts and researchers have begun to factor that overlap into broader scenarios: Wolfe Research says the idea of a Tesla–SpaceX merger has moved into the mainstream, and Morningstar suggested Tesla shareholders could end up controlling as much as 66% of a combined entity. Those dynamics make some investors both sellers of Tesla and buyers of SpaceX, depending on strategy and tax or liquidity needs.
The scale of the SpaceX book build helps explain why selling pressure showed up in Tesla’s tape. Demand reportedly exceeded supply by roughly fourfold, and that kind of concentrated interest around a single new issue can pull fast-moving cash out of existing positions. For some holders, especially retail accounts, a once-in-a-generation IPO priced at $135 per share and seeking a $1.8 trillion valuation is the kind of event that prompts portfolio rebalancing.
There is a built-in contradiction in the current market mood. Underwriters and some market participants expect a Day 1 pop, which can accelerate flows into SPCX ahead of the debut, but the IPO’s multiples are extreme by conventional metrics. Black’s assessment — that bankers will engineer an initial lift while the valuation itself is too rich for buy-and-hold investors — highlights that tension and frames the trading choice many face this week.
What the market does after SpaceX lists on Friday will decide whether Tesla’s decline is a one-off rotation or the start of a longer episode. If SPCX gaps up and new holders trim positions quickly to lock gains, Tesla could see further downward pressure. If demand is front-loaded and selling subsides, Tesla may stabilize. Investors tracking Tesla’s path can also look back at recent volatility: the stock has already suffered notable swings this year, including a prior 6.9% drop tied to product timing, and is presently set for a second weekly loss.
The unresolved question now is simple and consequential: will the rush into SpaceX be a short, self-contained trade that gives Tesla room to recover, or will sustained rotations by retail buyers and institutional allocations keep tesla stock depressed beyond Friday’s debut? The answer will determine whether Wednesday’s 4% slide is a blip or a signal of a broader reallocation across growth names as an $1.8 trillion company hits the market.
For background on recent Tesla moves, see Tesla Stock Price Drops 6.9% After Roadster Demo Pushed to August —
