Market Overview

Tesla Ticks Higher On Rumor Of Volkswagen Interest

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Tesla Ticks Higher On Rumor Of Volkswagen Interest

Tesla Inc (NASDAQ: TSLA) shares traded higher by 2.8% on Thursday morning after a German magazine suggested VOLKSWAGEN AG/ADR (OTC: VWAPY) may be interested in a buyout of Tesla.

What Happened

According to Manager Magazin, Volkswagen CEO Herbert Diess is “the biggest Tesla fan” and would potentially be interested in a buyout. A Google translation of the article quotes a top Volkwagen source as saying Diess “would get in immediately if he could.”

“He believes Volkswagen could benefit from Tesla's battery and software expertise...The money is there too, for the beginning yes a participation,” a translated version of the article says.

A Volkswagen spokesperson denied the reported interested, according to Reuters.

The same article also reported Baillie Gifford's James Anderson said he could imagine Tesla without Elon Musk as CEO. Anderson noted Musk's style of management and communication history with shareholders as his main points.

Baillie Gifford is Tesla's largest institutional shareholder.

Why It’s Important

Tesla and Musk have consistently struggled to grow their business, hit production and financial targets, demonstrate consistent profitability and avoid negative press. Volkswagen could be the savior Tesla needs, but the market doesn’t seem to be taking the report too seriously based on the minimal initial reaction.

Investors will be watching to see if there is any further details confirming the rumors and what the potential terms of a buyout would be.

Tesla's stock traded higher by 2.4% to $226.10 per share at time of publication. The stock is down 33% year to date.

Related Links:

From $420 To $230: Where Tesla Stands One Year After Elon Musk's 'Funding Secured' Tweet

Concerning Trend': Wall Street Weighs In On Tesla's Q2 Earnings

Posted-In: Baillie Gifford Herbert Diess James AndersonM&A News Rumors Top Stories Media Best of Benzinga

 

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