Elon Musk Lost His Trillionaire Status as SpaceX Shares Dropped 26%. Are Tesla and SpaceX Stock Still a Buy?

The article highlights that Tesla shares are down 12.4% YTD, with profits shrinking and the stock trading at 368x trailing 12-month earnings, while SpaceX is reported to be down 26% from its highs. It also flags valuation and profitability risks for both businesses: SpaceX reportedly trades at 110x sales with high net losses, and Musk’s 82.3% voting control limits shareholder recourse. Overall, neither stock is presented as a bargain on the dip despite Musk’s large ownership stake.

Analysis

The market implication is less about Musk’s paper net worth and more about the unwind of a reflexive scarcity premium. When a founder-controlled asset derates, the first-order impact is usually multiple compression, but the second-order effect is that leverage to the founder narrative weakens across the whole Musk complex: TSLA loses some of its “optionality” premium, while any private-market enthusiasm for SPCX becomes more fragile because minority holders have no governance remedy if execution slips.

For Tesla, the key issue is not whether it still grows, but whether growth can outrun margin normalization. At its current valuation, even a modest reset in auto gross margin or a slower software mix shift can take several turns off the multiple over 1-3 months; that matters more than the day-to-day price action. The beneficiaries are not necessarily EV-only names, but lower-multiple OEMs and suppliers where expectations are already washed out and execution can surprise positively.

SpaceX is a different risk bucket: it is effectively a sentiment asset with very limited public-market expression, so the main tradable takeaway is indirect. If Musk wealth and attention are perceived as less elastic, the market may discount future financing enthusiasm for adjacent “vision” names and speculative tech more broadly. The contrarian view is that the selloff could be overdone if investors are extrapolating net-worth optics into operating fundamentals; the thesis breaks if Tesla prints an inflection in unit growth or margin, or if private-market demand for SPCX remains strong despite the drawdown.

Key Decisions for Investors

• Short TSLA on strength or via 1-3 month put spreads; thesis is multiple compression ahead of any earnings reset, with best risk/reward if the stock reclaims recent highs and fails to hold.
• Pair trade: short TSLA vs long a lower-multiple auto/OEM basket (e.g., GM/F) to isolate valuation reset rather than beta; this works best if EV pricing pressure persists over the next quarter.
• Do not chase SPCX as a tactical dip-buy; if accessible, treat it as a watch item only until there is verifiable evidence of profitability or a financing catalyst, because governance asymmetry makes drawdowns hard to underwrite.
• Set a falsification alert on TSLA next quarterly report: if automotive gross margin or delivery growth re-accelerates, cover shorts quickly; that would re-open the growth premium and invalidate the compression trade.