The timing could hardly be more precarious. SpaceX shares closed Friday at €93.96, down 3.48 percent in a single session, leaving the stock just 0.59 percent above the 52-week low of €93.41 touched on July 31. With a 14-day RSI hovering near 31 — a level technical traders read as oversold — the company now enters what may be its most consequential week since the record-breaking Nasdaq debut that raised roughly $75 billion in June.
A Denied Merger Story Refuses to Fade
The latest leg of the sell-off traces back to a Wall Street Journal report claiming Tesla management had been instructed to prepare for a potential sale or spin-off of its China business, ostensibly to clear a path for a merger with SpaceX. The newspaper cited SpaceX’s role as a major US defense contractor, arguing a combination would require shielding classified satellite and defense work from Chinese regulatory oversight.
Elon Musk moved quickly to quash the narrative, branding the report “absurd fake news” on his platform X and insisting the topic had “never come up in any discussion.” Tesla China separately dismissed the story as “false information” in comments to The Paper. Yet the denial has done little to settle investor nerves, not least because the report landed barely a week after Musk himself acknowledged a growing “overlap” between Tesla and SpaceX during the July 22 earnings call. He referenced a project dubbed “Terafab” but declined to elaborate on merger possibilities, telling investors such matters did not belong on a profit conference call.
The speculation has taken on a life of its own regardless. On prediction markets such as Kalshi, users currently price the odds of a Tesla-SpaceX combination by May 2027 at 49 percent.
China Exposure Adds Another Layer
Beyond the merger chatter, the WSJ report has refocused attention on Tesla’s reliance on the Chinese market, which accounted for roughly 18 percent of the automaker’s worldwide sales in the first half of 2026. Unlike many competitors, Tesla operates its Shanghai plant without a joint-venture partner. But the numbers there are softening: China sales fell about 9 percent over the same period, while domestic rival BYD has expanded its share of the electric-vehicle segment to approximately 72 percent. Whether any restructuring would stem from merger ambitions or Tesla’s own competitive pressures in China remains impossible to disentangle at this stage.
The Earnings Test Arrives
Tuesday, August 4, marks a milestone: SpaceX’s first quarterly report as a public company, due after the US market close, followed by a management audio conference at 4:30 pm Eastern Time. The first quarter of 2026 offers a reference point, though not a comforting one. Revenue grew more than 15 percent to $4.7 billion, but the net loss ballooned from $528 million to $4.3 billion. Operating cash flow improved to $1.05 billion from $727 million a year earlier, and the company ended the quarter with $15.9 billion in cash reserves.
Segment breakdown for the quarter showed Starlink’s connectivity business leading the way at $3.3 billion in revenue, followed by the AI division at $818 million and the spaceflight segment at $619 million.
Should investors sell immediately? Or is it worth buying SpaceX?
A Rare Operational Bright Spot
Just days before the numbers land, SpaceX delivered at least one positive headline. On July 24, the Starship rocket lifted off from Starbase in Texas for its 13th test flight — the first launch since the June IPO. The Super Heavy booster separated roughly two minutes into the flight and executed a controlled splashdown in the Gulf. About 18 minutes after liftoff, the mission deployed 20 new Starlink V3 satellites, marking the first in-flight test of that satellite generation. SpaceX engineer Kate Tice reported successful contact and laser communication with all 20 units.
The landing wasn’t flawless — not all required Raptor engines ignited, causing the booster to touch down at higher velocity than planned. But spokesperson Dan Huot framed the outcome constructively, noting it marked the first time an intact Starship landed in water, yielding valuable heat-shield data.
The Lock-Up Looms Larger
The earnings release cannot be separated from the expiration of the insider lock-up period that follows it. Once the Q2 numbers are out, certain early shareholders gain the right to sell freely for the first time — potentially releasing another 20 percent of outstanding shares into the market and more than quadrupling the free float.
Morningstar analyst Nicolas Owens expects a substantial portion of those shares to actually hit the market, citing low cost bases and long holding periods among the sellers. He also considers it plausible that the recent slide already anticipates some of this impending dilution.
Wall Street Holds Its Ground
Despite the share price weakness, the analyst community has yet to materially revise its view. TipRanks data aggregating 30 analysts shows a “Moderate Buy” consensus, comprising 23 buy ratings, six holds and a single sell. The average price target stands at $239.04, implying roughly 110 percent upside from current levels.
Morgan Stanley’s Adam Jonas sees the upcoming report as an opportunity for greater clarity on long-term growth strategy. His primary catalyst: the planned expansion of AI computing capacity by more than 2 gigawatts over the coming year.
The setup heading into Tuesday is unusually split. Convincing operational commentary and credible Starlink margin data could steady the ship even as the float expands. But a disappointing print would land on a stock already sitting at its 52-week low, with newly unlocked shares poised to add further pressure.
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