Apple getting into the car business? It's a great idea, says Tesla boss , as he admits meeting
Could Apple be thinking about a bid for Tesla the number one electric car company? Tesla stock reached a record high yesterday- over $200 - after a report that Apple might be thinking of just such a thing.
Tesla: Could Apple be sniffing around ?
Analysts had already upgraded the stock ahead of the electric car maker's fourth-quarter solid earnings announcement today but the trigger for the rumours was a report that CEO Elon Musk met with the head of mergers and acquisitions at Apple last year.
There were many, many doubters that Apple and Tesla could be thinking of some sort of deal. But later in a conversation Musk admitted the meeting. After his upbeat earnings report Musk discussed the company’s future, including a massive battery “gigafactory” and the upcoming third-generation Model X on a conference call.
But perhaps the biggest news from Musk came in another call with Bloomberg Television right after the earnings report. Musk claimed that Tesla would lead the way in nascent autonomous car technology, and also admitted to meeting with Apple about… something.
“We had conversations with Apple. I can’t comment on whether those revolved around any kind of acquisition,” Musk told Bloomberg’s Betty Liu.
When Liu pressed Musk on what advice he might give to Apple about getting into the car business, he responded “I’d probably tell them that I think it’s a great idea.”
The Apple takeover buzz was fired by a weekend San Francisco Chronicle report.
The report caused a stir, but cited only a single, unnamed source on the meeting's happening , and did not provide any specifics about what happened beyond Musk supposedly meeting with executive Adrian Perica and - and heres's the kicker - "probably" Tim Cook himself. Then Musk added to it all.
Liz Jarvis-Shean, a Tesla spokeswoman, declined to comment on the story said the Chronicle. . Kristin Huguet, a spokeswoman for Apple, didn't return a call seeking comment either. Now that's a surprise!
Many analysts shot down the possibility of Apple acquiring Tesla.
"I would put zero chance of a merger," Jeffries analyst Peter Misek told CNBC .
"There's no indication" that Apple may acquire Tesla, Stifel Nicolaus analyst James Albertine told Bloomberg. Albertine agreed with three other analysts that the report helped dive up Tesla stock yesterday.
Despite being sniffy, some analysts did say however that cash-rich Apple and Tesla could work together, similar to Musk's collaboration with Google on driverless cars.
"(Steve Jobs') departure has left a big gaping hole even now with all the talent they have at Apple, so they would certainly look to collaborations and Musk certainly fits that bill," Misek told CNBC.
He mentioned Apple electronics appearing in the back seat of Tesla's upcoming Model X SUV as a "possible target" for both companies.
Tesla shares gained 2.8 percent to $203.70 yesterday
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Baird analyst Ben Kallo increased his target price for Tesla from $187 to $215 , explaining that he believes the company will announce higher sales totals than expected when the releases its earnings report today, and “could surprise with other announcements.
Tesla has already announced that it sold 6,900 Model S cats in the fourth quarter, higher than expected.
Apple shares gained 0.4 percent to $545.99 in the wake of the report, which also highlighted Apples reported plans to focus on health with a possible wearable product this year. The company was named the world's most valuable brand for the third year in a row, said the San Jose Mercury News.