$TSLA · Parkev Tatevosian, CFA · 2026-10-28

We have great news for Tesla stock investors as talk grows about a SpaceX takeover . A Barclays analyst raised his target for the company's stock price to $450 , citing the acquisition premium SpaceX would have to pay to buy Tesla.

Barclays Bank believes that Tesla's merger with SpaceX will offer shareholders an acquisition premium, while Tesla's core business of manufacturing electric cars and its autonomous taxi project gains further momentum.

Principal analyst Dan Levy upgraded Tesla's rating from "equal weight" to " overweight" and raised his price target to $450 from $370, citing the convergence of these positive factors.

Tesla's stock rose 6% on Monday, as it doesn't take much to create more momentum for Tesla's stock.

It is one of the most popular stocks in the market , if not the most popular of all . Investors like to buy a stock when positive news and developments emerge. So, an interesting point about this acquisition between SpaceX and Tesla.

Typically, when one company acquires another, the acquiring company has to pay an additional premium to complete the deal.

For example, Tesla stock is currently trading at $395. Let's say $396. If SpaceX wanted to acquire Tesla, it would have to pay much more than $396, because Tesla shareholders would not agree to that price .

Tesla shareholders will also need to vote and approve the acquisition. For example, if SpaceX said: "We want to acquire Tesla and we want to pay $400 per share." This will require a vote of more than 50% of Tesla's shareholders to approve.

I do n't think they'll get that vote from Tesla shareholders, do they? Otherwise , Tesla shareholders could have sold their shares at $396 today, but nobody is selling. In fact , the number of buyers exceeds the number of sellers if you look at the price movement while I discuss these developments.

Therefore, in order to entice Tesla shareholders to approve the acquisition, SpaceX will have to pay a premium. Now, I think this bonus should be at least 10% , and I don't even think 10% will be enough.

Therefore, the minimum bid should be $440, in my opinion. It might be closer to a 20% bonus. So, we're talking about a price of $480 now if SpaceX wanted to acquire Tesla. At that point, I think they will get a great deal of shareholder approval.

This is just speculation on my part, but these are the numbers I work with and what I have seen from other acquisition targets, acquisition announcements and decisions made by other companies.

Now, does this make sense? Does this make sense from a business perspective? Does this seem logical for SpaceX? My answer is yes. Elon Musk runs several companies. Being the CEO of both SpaceX and Tesla, that is, being the CEO of two separate companies, requires far more work than being the CEO of a single merged company.

For example, there are quarterly calls that Elon Musk has to participate in. He can reduce it by four calls; Instead of participating in four separate calls for Tesla, he could integrate Tesla's business into SpaceX and participate in four fewer calls.

Considering the amount of money Elon Musk makes per hour, this is already a significant improvement in SpaceX's piloting efficiency .

This is just one clear example I'm referring to. There are many reasons and efficiency gains that result from combining these two companies. So, I think it makes perfect business sense.

In terms of evaluation, no, I don't think it makes any sense at all .

I think Tesla is already valued at much, if not excessively, above its true worth. We can argue about how overvalued it is, but I think most investors would agree that Tesla stock is overvalued.

So, the valuation doesn't seem logical, but that doesn't really matter in the grand scheme of things for SpaceX because it will be integrating Tesla into SpaceX.

They will not pay in cash. I don't think they will pay in cash. I think they will pay in shares. SpaceX stock is also highly rated. I don't think SpaceX is as overvalued as Tesla, but SpaceX is also overvalued.

Both trade at top-quality ratings due to the " Elon Musk premium". The number of fans Elon Musk has, and the willingness of these fans to pay an extra price to own one or more of his companies, leads to this high valuation that exceeds the actual value of the company or what the company will actually produce in profits and cash flows.

I believe this will remain the case for the foreseeable future.

I don't see it, unless there is an incentive to turn fans away from Elon Musk—which has already happened in several situations that have shaken confidence at times —but many investors have been patient and stuck with Elon Musk through thick and thin, and I think they will continue to support his decisions , whether he decides to complete this acquisition or not.

But perhaps more important than the positive aspects of this move is the protection from the negative aspects for Tesla stock investors. You mentioned that Tesla stock is extremely overvalued , but the existence of this acquisition possibility by SpaceX protects Tesla stock investors to a certain extent, doesn't it?

There is a point below which the stock price is unlikely to fall , because if it does , the acquisition will be more attractive to SpaceX . So, now imagine SpaceX trying to handle the logistics of how to complete this acquisition.

Tesla's stock, with a market capitalization of over $1 trillion, is trading at this price level of $400.

If the price drops to, say, $300 or $200, the acquisition will be much easier for SpaceX to absorb and for its stock investors to support. Therefore, I don't think the bottom is as low as it was before SpaceX's highly successful IPO , which gave Elon Musk the capital to acquire Tesla at an excellent valuation because SpaceX stock is worth so much.

So, this is great news for Tesla stock investors, as the stock price here has risen by more than 6% following this Barclays analyst announcement.