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Tesla shares tumble again on concerns about buyout funding

Tesla reportedly got buyout interest from Volkswagen

Tesla shares fell 7 percent early on Monday as a steep cut in JPMorgan Chase’s price target for the electric carmaker added to growing doubts among market players about a plan to take the company private.
Slashing its price target for Tesla from $308 to $195, the brokerage said it did not believe chief executive officer Elon Musk had the funding for a plan announced by tweet just under two weeks ago.
Analysts from the US bank had upped its forecast from $198 to $308 after a surge in Tesla stock following Musk’s tweets Aug. 7, but its analysts said they now thought the deal was a long way from completion.
It now targets the stock, which it continues to value at underweight, back at $195, versus Friday’s close of $305.50. The median price target of the Wall Street analysts covering Tesla is $336.
“Our interpretation of subsequent events leads us to believe that funding was not secured for a going private transaction, nor was there any formal proposal,” analyst Ryan Brinkman wrote in a client note.
“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, suggesting formal incorporation into our valuation analysis seems premature at this time,” Brinkman said.
At $286 in premarket trading Monday, Tesla was set to open at its lowest since the start of June.
Tesla stock fell nearly 9 percent Friday after Musk gave an emotional, hour-long interview to the New York Times, saying he was under major emotional stress and “this past year has been the most difficult and painful year of my career. It was excruciating.”
People familiar with the matter said Sunday that PIF, the Saudi Arabian sovereign wealth fund that Musk has said could help find the billions of dollars needed for the buyout, is in talks to invest in aspiring Tesla rival Lucid Motors.

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