Another Wall Street bank has dropped coverage of Tesla — and it could be a sign Elon Musk is making progress in taking the company private

CNBC via Yahoo FinanceMorgan Stanley autos analyst Adam Jonas

Morgan Stanley has dropped research overage of Tesla in what could be another sign of Elon Musk’s electric-car company tapping banks for financial services in its bid to go private.

Goldman Sachs previously 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.

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, with a price target as high as $US379 – before cutting it to below $US300 in recent weeks. Bloomberg data showed Tuesday that Morgan Stanley has 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.

Shares of Tesla were up about 1.7% in trading Tuesday.

This story is developing

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