The bad news seems to keep on coming for Tesla Inc., and one expert says this is the year the electric-car company “comes undone” — and maybe gets bought by Apple Inc.
will be acquired in the near future.
“I think Tesla goes below $100 a share within 12 months,” Galloway said, “and I do think it gets acquired, because there’s real brand value there.”
And he thinks Apple
could be that buyer.
“Apple is the premiere organization in the world for creating tech hardware, and you would argue that Teslas are premiere tech hardware. So, from a product standpoint, it makes sense,” he said.
Galloway said if that happens, look for the Tesla brand to fade away eventually. “At the end of the day, there’s one core brand here, which means they’d be overpaying. So, over time, they’d probably turn it into the Apple car.”
Rumors of Apple buying Tesla have percolated for years, and Roth Capital Partners analyst Craig Irwin told CNBC earlier this week that the tech giant made a serious bid in 2013, for $230 a share.
Apple has reportedly had self-driving-car aspirations for years, though those plans have changed their focus dramatically. It laid off nearly 200 workers from its autonomous-car unit earlier this year, according to Reuters.
Earlier this month, Apple CEO Tim Cook acknowledged the company buys a company “every two to three weeks” — though obviously nothing as big as Tesla, yet. Its biggest acquisition to date was the 2014 deal for Beats, for $3 billion.
And Apple could probably afford it — it has about a $113 billion net-cash balance, according to its most recent quarterly earnings report.
Wednesday was not a good day for Tesla, as its stock fell for a sixth straight day, hitting another 2½-year low. Consumer Reports also issued a scathing report on Tesla’s Autopilot driver-assistance feature, and called into serious question Musk’s promise to have fully autonomous vehicles on the road as early as next year. Market analysts continue to lower their price targets, with growing concern over Tesla’s slumping sales and its future cash burn. On Tuesday, Morgan Stanley gave a worst-case scenario of Tesla stock falling as low as $10 a share, citing slacking demand.
Tesla shares have plunged 42% year to date, compared to the S&P 500’s