- Morgan Stanley has joined Goldman Sachs in restricting its research coverage of Tesla.
- Tesla CEO Elon Musk is attempting to take the electric-car maker private and has begun tapping banks for services.
- Follow Tesla’s stock price in real time here.
Morgan Stanley has dropped its research overage of Tesla in what could be another sign that Elon Musk’s electric-car company is tapping banks for financial services in its bid to go private.
Goldman Sachs dropped coverage last week and said it was “acting as a financial advisor in connection with a matter that is fundamental to the reasonable analysis of the rating and price target for the stock.”
Morgan Stanley declined to comment. Tesla did not immediately respond to a request for comment.
The bank’s autos analyst, Adam Jonas, is known for producing some of Wall Street’s more entertaining research reports on everything from a potential SpaceX-Tesla merger to a breakup of General Motors. Until recently he was a major Tesla bull; his price target had been as high as $379 before he cut it to below $300 in recent weeks. Bloomberg data showed Tuesday that Morgan Stanley had restricted its coverage.
It is typical for a bank to suspend coverage when its investment-banking unit does business with a company under the bank’s sell-side department’s research coverage. The two departments of any given bank are legally required to maintain independence through what is known as a Chinese wall.
Musk has come under fire from other equity analysts over a tweet in which he suggested, seemingly incorrectly, that there was “funding secured” for a deal to take Tesla private. JPMorgan on Monday cut its price target for Tesla shares to $195 from $308, saying “funding appears to not have been secured.”
Tesla’s stock price has whipsawed in the two weeks since Musk sent out that tweet, in which he also suggested the company would go private at $420 a share. After initially skyrocketing to $389 —near record highs — shares briefly fell back below $300 on Monday following a slew of securities-fraud lawsuits and a reported subpoena from the US Securities and Exchange Commission.
Shares were up about 1.7%, to $312, on Tuesday morning.
Read more about Tesla’s bid to go-private:
- JPMorgan walks back its enthusiasm for Tesla’s go-private bid, says ‘funding appears to not have been secured’
- The SEC reportedly sent subpoenas to Tesla concerning Elon Musk’s tweets about taking Tesla private
- IT’S OFFICIAL: Goldman Sachs is advising Elon Musk on his plans to take Tesla private
- Members of Tesla’s board of directors are said to be lawyering up as crisis around Elon Musk deepens
- Pressure mounts on Tesla as it gets hit with a third securities fraud lawsuit in wake of Elon Musk’s ‘funding secured’ tweet
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- It looks like ‘Y2K all over again’ for stocks as evidence of an imminent crash continues to pile up