Tesla heads for longest slide in a month amid deal-funding doubt
Tesla Inc. is slumping toward a fifth straight decline, the longest streak in more than a month, amid fresh doubts about Elon Musk’s effort to take the company private.
JPMorgan Chase & Co. scrapped any modelling in its price target for the possibility that Musk will buy out some investors at $420 a share. JPMorgan analyst Ryan Brinkman, who rates Tesla the equivalent of a sell, said such a deal is “potentially far from even being formally proposed.”
The bearish analysis followed a report Sunday that Saudi Arabia’s sovereign wealth fund — the very investor that Musk has described as a linchpin of his plan to take Tesla private — was considering buying a stake in another U.S. electric-car company.
The Saudis’ Public Investment Fund, which recently purchased almost 5 per cent of Tesla, is in talks for a separate $1 billion investment in Lucid Motors Inc. that would give the fund control of that fledgling automaker, Reuters reported.
Tesla fell 1.9 per cent to $299.77 at 2:09 p.m. in New York, pointing toward a fifth straight daily drop, the longest streak since a similar run through July 6, according to data compiled by Bloomberg.
Investors have been rattled since Musk gave an alarming interview last week to the New York Times in which he said no one reviewed his tweet about taking the company private before he posted it. His description of using a prescription drug to sleep and of the toll that leading Tesla has taken on his personal life also raised questions about the well-being of the largerthan-life chief executive officer.
Brinkman, who had hiked his price target on Tesla to $308 after Musk’s initial take-private tweet on Aug. 7, dropped it back to the earlier level of $195. He cited the CEO’s Aug. 13 blog post in which he said the Saudi PIF had asked for more information about how the transaction could be pulled off.
“We now believe that such a process appears much less developed than we had earlier presumed,” Brinkman wrote in a note to clients.