According to Bloomberg on May 18, as SpaceX’s IPO draws near, Wall Street analysts are largely concerned that it will place additional pressure on Tesla’s stock price. For years, Tesla was the sole publicly traded company allowing retail investors to participate in the ‘Musk-themed’ investment theme; this dynamic is set to change once SpaceX goes public. Joe Gilbert, fund manager at Integrity Asset Management, stated, “This certainly isn’t good news for Tesla,” noting that Musk’s attention will likely shift primarily toward SpaceX. James Picariello, analyst at BNP Paribas, estimates that retail investors hold roughly 40% of Tesla’s shares and wrote in a recent report that the SpaceX IPO would ‘fragment’ the pro-Musk retail investor base, thereby negatively affecting Tesla’s valuation.
Looking at the data, since SpaceX confirmed plans for its IPO in December last year, net retail inflows into Tesla have totaled merely $1 million, according to Vanda Research; the number of days featuring inflows nearly matches those with outflows, indicating a clear dip in retail enthusiasm. Year-to-date, Tesla’s stock has fallen about 8.9%, despite posting a cumulative gain of 265% between 2023 and late 2025. Currently, its forward P/E ratio stands at approximately 196 times, making it the second-highest among S&P 500 constituents — a valuation heavily contingent on investors’ belief in Musk’s ambitious vision involving autonomous driving and robotics. Nicholas Colas, founder of DataTrek Research, pointed out that since the market essentially bets on ‘Musk himself,’ merging both companies would be the optimal solution; reportedly, Musk himself is also considering such a merger between Tesla and SpaceX.