- Morgan Stanley dropped coverage of Tesla on Tuesday, becoming the second bank to restrict the stock.
- Shares surged as much as 5% following the news.
- Also on Tuesday, new documents show the gruelling ways Tesla hit its production goals in June.
- Follow Tesla’s stock price in real-time here.
Shares of Tesla spiked as much as 5% Tuesday morning after Morgan Stanley became the second Wall Street bank to restrict its coverage of the stock and remove its price target. It could be a sign that Elon Musk is making progress in his bid to take the electric-car maker private.
Goldman Sachs dropped coverage last week, as is typical when a bank’s investment banking division is hired by a company its equity research department covers. The two departments are legally divided by a so-called Chinese wall that prevents the two divisions from conflicts-of-interest.
Also on Tuesday, new documents reported on by Business Insider’s Linette Lopez showed the gruelling way Tesla reached its goal of producing 5,000 Model 3 sedans per week. Of the 5,000 produced in the last week of June, 4,300 required rework, the documents show.
And finally, In a video factory tour with YouTube star Marques Brownlee published early Tuesday, CEO Elon Musk said Tesla may be able to produce an electric car for $US25,000, but that it would take three years to get there.
“I think in order for us to get up to…a 25,000 car, that’s something we can do,” he said. “If we work really hard, I think maybe we can do that in three years.”
He added that design and technology improvements are the keys to affordability, but that scale of production plays an important role as well.
Tesla’s stock price has whipsawed in the two weeks since Musk first tweeted his plan to take Tesla private at $US420 a share. After initially skyrocketing to $US389 -near record highs – shares briefly fell back below $US300 on Monday following a slew of securities fraud lawsuits and a reported subpoena from the Securities and Exchange Commission.
Shares are currently trading 32% below Musk’s target of $US420 per share.
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
- The legendary investor who predicted the past 2 bubbles breaks down how the 9-year bull market will end
- GOLDMAN SACHS: The market is about to be redefined by one huge shift – and buying these 14 stocks could help you make a killing
- It looks like ‘Y2K all over again’ for stocks as evidence of an imminent crash continues to pile up
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