- Saudi Arabia has been in talks with electric-car maker Lucid Motors, Reuters reports Monday.
- JPMorgan (NYSE:JPM) cut its price target for Tesla (NASDAQ:TSLA) to $195 from $305 on Monday, citing the fact funding has not been secured like Elon Musk originally said.
- Tesla shares sank more than 6% in early trading Monday.
- Follow Tesla's stock price in real-time here.
News of the talks comes almost two full weeks after the Financial Times reported the kingdom’s sovereign wealth fund had bought a 3-5% stake in Tesla. That report was followed by a tweet from CEO Elon Musk stating that funding had been secured to take the electric-car maker private at $420 per share.
In response, Tesla shares skyrocketed to a near record highs, hitting of $387.46 apiece, on August 7. But they had slumped more than 20% from that level through Friday, and Monday's selling, which has wiped away all of Tesla's post-earnings gains, is adding to those loses. The sell-off has been a windfall for Tesla short sellers, who have made more than $1.3 billion in the process.
The big profits seen by the short sellers come much to the chagrin of Musk, who told the New York Times in an interview published Friday that he’s gearing up for "months of extreme torture" from those betting against his stock.
Also weighing on Tesla’s stock price in early-trading Monday was a price-target cut from JPMorgan. The bank's analyst, Ryan Brinkman slashed his target by more than 35% to $195 a share, citing the fact that funding was not actually secured at the time Musk claimed it had been.
"The revelation the Saudi fund is subsequently asking Tesla for details of how the company would be taken private suggests to us that any deal is potentially far from even being formally proposed," Ryan Brinkman told clients in a note Monday, Bloomberg reported.
Wall Street now has an average target of $331 for Tesla, according to Bloomberg, 26% below Musk's $420 target for taking the company private.