Morgan Stanley's Adam Jonas, one of the most bullish Tesla Motors (TSLA) analysts, had a change of heart on the stock Thursday.
Jonas slashed his price target on the stock to $245 from $333 and downgraded it to "equal weight" from "overweight," citing the company's proposed acquisition of SolarCity (SCTY).
"Given the uncertainty as to whether TSLA and SCTY shareholders will approve the proposal, we have not made changes to our operational assumptions, and have not, at this stage, modeled in an acquisition of SCTY," Jonas said in a Thursday note to clients.
Tesla said Tuesday after the close it would bid $2.8 billion for SolarCity, sending both stocks on diverging paths. Tesla shares fell sharply Wednesday, while SolarCity's stock soared .
Tesla shares slipped to $196.40 on Thursday.
Analysts at Morgan Stanley also downgraded SolarCity's stock to "equal weight" from "overweight" and cut their price target to $24 from $34.
"We still see upside to our [discounted cash flow]-driven price target and the potential acquisition price … However deal approval is uncertain and we see several fundamental risks that could be magnified should the deal not close," Morgan Stanley said in a Thursday note.
SolarCity's stock was slightly higher at $21.98.
Over the past year SolarCity's stock has plunged more than 62 percent, while Tesla's has shed 26 percent
I actually think it may be the last opportunity to short above $195
Tesla Motors: Will the Last Bull Please Turn Out the Light -- Barron's Blog
By Ben Levisohn
Earlier today, we noted that Tesla Motors ( TSLA) uber-bull Adam Jonas had cut his rating on the upstart automaker following its purchase of SolarCity ( SCTY). Pacific Crest's Brad Erickson wonders if bullish investors will bail on Tesla as well:
Tesla's bid for SolarCity potentially illuminates a disconnect between Tesla management's view of its future versus its shareholder base, which will have to be reconciled in the coming weeks and months as an outcome emerges. While we remain positive on the company's car business and are looking for in-line deliveries in the upcoming quarterly announcement, we remain Sector Weight on the name in light of the acquisition overhang and the potential shareholder disruption this causes.
Tesla suffering from a downward sloping credibility curve. On its conference call [yesterday] morning, management offered some positives including: (1) SolarCity getting to cash flow breakeven in a few quarters (when including securitization in-flows) and (2) the combined entities being able to reduce expenses by "50%, or maybe 20%-30%" by some unknown time frame. We believe investors' appetite for living through the increased integration and execution risk may be declining. As such, we wonder if the Tesla story that has captivated so many investors over the past five years will attract the same level of shareholder interest in the future with a yet-to-show-evidence-of-fiscal-solvency rooftop solar company attached to it. We're not convinced at this point
Tesla CFO needs to start doing his job, put his foot down and stop Musk from
doing stupid things that jeopardize the company.
Throw a net over Musk and cancel this SCTY deal.
Do they just rubber stamp everything he does?
27% premium wasnt enough?
... I'm not convinced youll even get that.
Shareholders arent happy with the genius CEO
... but at reduced margins for Tesla. Not a good sign of things to come?
Last year, we reported on Atieva, an electric vehicle startup founded by Bernard Tse, a former Tesla Vice President and board member. Tse was on Tesla’s board from 2003 to 2007 and he headed Tesla’s short-lived energy division during his last year at the company – long before it relaunched a new and improved ‘Tesla Energy’ division in 2015.
Tse resigned from the board to head the ‘Tesla Energy Group’, but left not long after Martin Eberhard, then Tesla’s CEO and longtime friend of Tse, was ousted by Elon Musk. Tesla reorganized to adjust their worrying cash burn at the time and focused on the Tesla Roadster instead of energy storage solutions.
After leaving, he found Atieva with the ambition to make it something similar to what he and Eberhard hoped the ‘Tesla Energy Group’ could become; a company developing cell agnostic battery packs both for third-party electric vehicles and other energy storage applications.
But as we reported last year, the company eventually hired Peter Rawlinson, Tesla VP and Model S Chief Engineer, along with several other EV experts from Tesla and other companies, and then changed its focus to bring to market a new electric vehicle from the ground up and not just the drivetrain.
The company received hundreds of millions in funding from investors including Mitsui & Co and Venrock to develop its EV platform and its first vehicle.
Full story at electrek
Earlier this year – not long after the Dieselgate scandal – the Volkswagen Group announced a new direction for its lineup of vehicles with a plan to introduce 20 new electric vehicles through the group’s brands by the end of the decade.
Today, the automaker extended the timeline to 2025 and said that it will introduce “more than 30 new electric vehicles during the next 10 years”. Earlier this year, CEO Matthias Müller was talking about both all-electric and plug-in hybrids, but now he is making a statement to go all-electric and confirmed that the “more than 30 new models” will all be “purely battery-powered electric vehicles (BEVs)”.
But maybe even more importantly, VW talked about volumes and said that the group is putting together a new manufacturing plan that will enable them to produce “2 to 3 million all-electric cars a year by 2025”.