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Tesla slips as doubts grow over Elon Musk take-private plan | Tesla slips as doubts grow over Elon Musk take-private plan |
(35 minutes later) | |
Tesla shares fell under $300 on Monday amid growing doubts about Elon Musk's ability to take the company private. | Tesla shares fell under $300 on Monday amid growing doubts about Elon Musk's ability to take the company private. |
Shares in the electric car maker are down more than a fifth since he revealed the plan in a tweet on 7 August. | Shares in the electric car maker are down more than a fifth since he revealed the plan in a tweet on 7 August. |
Some analysts predict Tesla still has further to fall: JPMorgan Chase has cut its price target from $308 to $195. | Some analysts predict Tesla still has further to fall: JPMorgan Chase has cut its price target from $308 to $195. |
The bank's analysts cited doubts about Mr Musk's claims to have secured funding for his take-private plan. | The bank's analysts cited doubts about Mr Musk's claims to have secured funding for his take-private plan. |
"Tesla does appear to be exploring a going private transaction, but we now believe that such a process appears much less developed than we had earlier presumed (more along the lines of high level intention)," said Ryan Brinkman at JP Morgan. | "Tesla does appear to be exploring a going private transaction, but we now believe that such a process appears much less developed than we had earlier presumed (more along the lines of high level intention)," said Ryan Brinkman at JP Morgan. |
The bank had raised its forecast following Mr Musk's tweet, which he later said was based on discussions with Saudi Arabia's sovereign wealth fund. | The bank had raised its forecast following Mr Musk's tweet, which he later said was based on discussions with Saudi Arabia's sovereign wealth fund. |
However, Mr Brinkman said it was now clear that the fund's commitment remained uncertain: "Formal incorporation into our valuation analysis seems premature at this time." | However, Mr Brinkman said it was now clear that the fund's commitment remained uncertain: "Formal incorporation into our valuation analysis seems premature at this time." |
Tesla shares hit $380 on 7 August following Mr Musk's tweet, but have continued to fall since then. | Tesla shares hit $380 on 7 August following Mr Musk's tweet, but have continued to fall since then. |
They were down 1% at $302.50 in afternoon trading in New York on Monday. | They were down 1% at $302.50 in afternoon trading in New York on Monday. |
The slide this month has been good news for short sellers, who bet that Tesla's share price will fall. | The slide this month has been good news for short sellers, who bet that Tesla's share price will fall. |
In recent years, their holdings have declined in value as the share price rose sharply. | In recent years, their holdings have declined in value as the share price rose sharply. |
Since the now infamous tweet, the value of their holdings has risen by more than $1.4bn, according to S3 Partners, a New York research firm. | |
Mr Musk has a well-known dislike of short sellers, whom he has called "jerks who want us to die" and argued that taking Tesla off the stock exchange would shield it from their attacks. | Mr Musk has a well-known dislike of short sellers, whom he has called "jerks who want us to die" and argued that taking Tesla off the stock exchange would shield it from their attacks. |