Tesla Doubts Grow: JPMorgan Cuts Target to $195


Analysts have increasing doubts about Musk's ability to take Tesla private.

The BBC reports Tesla Slips as Doubts Grow Over Elon Musk's Take-Private Plan.

>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.

>"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.

>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."

I have a stake in this matter now. $195 would suit me quite fine if it happens soon enough. I got in on August 16 as noted in Initiated a Short Position in Tesla Yesterday: Luck of the Draw Interview Today.

I am still way out of the money on my $230 strike price, so for me, bad news on Tesla is welcome.

Mike "Mish" Shedlock

Comments (5)
No. 1-4

Mish, Nice move with your short position on TESLA.


TSLA price target should be ZERO. The equity is worthless. Only the bonds may be worth a look if they crash any further.


Well now that the cat's out of the box the stock price can go down, last week it was a pump, now it's a dump.


I am predicting that Elon Musk will do the unthinkable and have Tesla cash burn dropped on the 3rd quarter and become slightly profitable on the 4th quarter.

Since Tesla is a story stock based on future like zero margin Amazon (without AWS) or like Netflix which has more content payments coming up than they have current cash flow that would be enough to rocket Tesla to 400ish which would mean convertible debt owners would take stock and Tesla future would look bright if they had no debt repayments and investors would take stock instead while Tesla became profitable.

I believe there are too many bears right now for a crash to happen. After bears get slaughtered in late 2018 I think the market crash will happen in 2019 either in the spring or autumn.

Global Economics