Home Tesla Motors Inc. (TSLA) Spikes As Google Inc. (GOOG) Rumors Suggest $275 Buy
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Tesla Motors Inc. (TSLA) Spikes As Google Inc. (GOOG) Rumors Suggest $275 Buy

Paul Shea

Tesla Motors Inc (NASDAQ:TSLA) stock was trading up on Thursday as the rest of the market moved lower. The spike in share price may be linked to a rumor that Google Inc (NASDAQ:GOOG), (NASDAQ:GOOGL) may be set to offer to buy Tesla Inc.. At time of publishing those rumors suggested that the firm would be bought out for around $275 per share. That is 11% over this morning’s opening price.

Google Inc. (GOOG), Tesla Motors, Inc (NASDAQ:TSLA)

Rumors of big tech buys have been widespread in the first months of 2015, but none of the deals has yet come into any sort of reality. It is likely that the Tesla Motors Google rumors are without any basis, and will disappear in the coming days if not in the hours ahead.

Google looks at Tesla deal

Twitter was flurrying with rumors of a Tesla Motors / Google tie up this morning. There are some reasons to believe that Elon Musk would consider a deal. A new book about the tech maven’s life says that he approached Google about a deal back in 2012 when the firm was doing poorly. He is good friends with Google CEO Larry Page.  That deal was nixed after Tesla Motors Model S shares picked up, but Mr. Musk has been linked to talks with other tech firms, including Apple Inc. (NASDAQ:AAPL) in the last year.  In the same book, Musk expresses concerns that Google could unintentionally create artificially-intelligent robots that might turn against humanity.  Seeing as how Musk is focused on helping humanity survive here on Earth and eventually colonize Mars, a deal with Google seems unlikely.

 

There are no details about any sort of deal, but some Twitter users are saying that it might entail a partnership between the two firms rather than an outright purchase. Google might agree to fund the company by buying a large new stock issue.

Tesla could use some cash

Tesla Motors, as can be seen in the firm’s earnings reports, burns a lot of cash. Adam Jonas of Morgan Stanley said that the latest earnings report showed “eye-watering” cash burn. The company will run out of cash before the end of the year if it doesn’t do something to solve the problem.

At time of writing shares in Tesla Motors were up to $251.66, a 1.71% rise for the full day’s trading so far. The S&P 500 (NYSE:.INX) was down by 0.37% as traders stayed nervous about the stock market on news of a slow down in China

If there is any more information about the deal through the day we will report on it. Right now there is no basis to the stories that Tesla Motors and Google will bring any sort of a partnership into the public eye.

Rumors of a takeover don’t seem credible given Mr. Musk’s reaction the last time one was on the cards. Tesla may need cash, but it doesn’t need it enough to de-list from the stock market and give up its independence. Stories that Google is buying a stake may, however, carry some weight in logical terms.

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