Tesla Shares Rise to Record on Apple Acquisition Speculation
Tesla Motors Inc. (TSLA) closed above $200 for the first time amid speculation about the nature of a 2013 meeting between the electric-car maker’s chief, Elon Musk, and Apple Inc. (AAPL)’s head of mergers and acquisitions.
Musk, Tesla’s chief executive officer and co-founder, met with Apple’s Adrian Perica in early 2013, the San Francisco Chronicle said on Feb. 16, citing a person familiar with the matter who wasn’t identified. Liz Jarvis-Shean, a Tesla spokeswoman, declined to comment on the story. Kristin Huguet, a spokeswoman for Apple, also declined to comment.
Tesla, which is scheduled to release fourth-quarter and 2013 results tomorrow, rose 2.8 percent to $203.70 in New York, the highest ever closing price for the maker of Model S sedans. The Palo Alto, California-based company’s shares have surged more than fivefold in the past 12 months.
Musk, who is also Tesla’s biggest shareholder, told Bloomberg in a May 2013 interview that he had no plans to step away from the company for “several years” and that an acquisition by another carmaker wasn’t likely. Still, being acquired is “one of the possible outcomes,” he said, adding that a potential buyer would have to have a big cash position. While he declined to speculate on possible buyers, he acknowledged that Apple was a company with a lot of cash.
“There’s no indication” an acquisition is a serious possibility now, James Albertine, an analyst with Stifel Nicolaus & Co., said in an interview today. He rates the shares hold.
Still, he and analysts Craig Irwin, of Wedbush Securities, Andrea James, with Dougherty & Co., and Dan Galves, of Deutsche Bank, all said today that the Apple chatter was partially responsible for the stock’s gain.
Investors also have an “expectation of positives on the upcoming conference call,” where Tesla will discuss its quarterly results, said Wedbush’s Irwin, who rates Tesla outperform.
The increase is a combination of “Apple speculation” and a boost in target prices for Tesla shares by other analysts, said Dougherty’s James, who rates Tesla a buy.
Ben Kallo, an analyst with Robert W. Baird & Co., today reiterated an outperform rating on Tesla and boosted his target price to $215 from $187.
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