Tesla Inc. shares, after slumping much of the day toward a fifth straight decline, ended Monday on the plus side despite fresh doubts about Elon Musk’s effort to take the company private.
The shares gain 1 percent to close the day at $308.44 in New York following a last-minute rally.
Earlier, JPMorgan Chase & Co. scrapped any modeling in its price target for the possibility that Musk will buy out some investors at $420 a share. JPMorgan analyst Ryan Brinkman, who rates Tesla the equivalent of a sell, said such a deal is “potentially far from even being formally proposed.”
The bearish analysis followed a report Sunday that Saudi Arabia’s sovereign wealth fund -- the very investor that Musk has described as a linchpin of his plan to take Tesla private -- was considering buying a stake in another U.S. electric-car company. The Saudis’ Public Investment Fund, which recently purchased almost 5 percent of Tesla, is in talks for a separate $1 billion investment in Lucid Motors Inc. that would give the fund control of that fledgling automaker, Reuters reported.
Investors have been rattled since Musk gave an alarming interview last week to the New York Times in which he said no one reviewed his tweet about taking the company private before he posted it. His description of using a prescription drug to sleep and of the toll that leading Tesla has taken on his personal life also raised questions about the well-being of the larger-than-life chief executive officer.
Brinkman, who had hiked his price target on Tesla to $308 after Musk’s initial take-private tweet on Aug. 7, dropped it back to the earlier level of $195. He cited the CEO’s Aug. 13 blog post in which he said the Saudi PIF had asked for more information about how the transaction could be pulled off.
“We now believe that such a process appears much less developed than we had earlier presumed,” Brinkman wrote in a note to clients. Taking Tesla private may be “more along the lines of high level intention” than a firm plan, the analyst said, so formally incorporating it into valuation analysis “seems premature at this time.”