Gene Munster: Apple would have the inside track on buying Tesla

“Apple would be the front runner amongst its fellow tech giants at making a successful bid to buy reeling automaker Tesla, according to Gene Munster, founder of Loup Ventures and longtime Apple analyst,” Jacob Sonenshine writes for TheStreet.

“The potential scenario of Tesla being acquired attracted renewed attention this week when news broke that Apple reportedly bid $240 a share for Tesla back in 2013. Tesla shares have tumbled now to roughly $197 a share, although taking into account the additional shares Tesla has issued and the debt it’s taken on means an acquisition now would still cost significantly more than it would have in 2013,” Sonenshine writes. “Munster told TheStreet that if Tesla were to be bought now, he thinks there’s a 50% chance that the buyer ends up being one of the deep-pocketed tech juggernauts with an interest in electric and autonomous vehicles — Apple, Alphabet, or Amazon. And among those three, ‘I think it’s probably 60% [it would be] Apple, 30% Google and 10% Amazon,’ Munster said.”

Munster’s case for Apple being the favorite to take out Tesla rests on three arguments:

  1. Apple Has a Good Fit With Transportation
  2. Apple Can Make Tesla Profitable
  3. Apple Has the Money

Read more in the full article here.

MacDailyNews Take: We’ll believe it when we see it.

Related articles:
Apple to buy Tesla? – May 22, 2019
Project Titan: Apple building large car drive rooms in California; made informal bid to buy Tesla at $240 per share in 2013 – May 21, 2019
Analyst: Apple will do a major media acquisition this year – April 4, 2019
Major Apple acquisition looms; ‘people will be shocked’ – April 4, 2019

16 Comments

  1. I doubt Apple wants to create the worldwide repair centers for Tesla.

    Hence, when it comes to “Exit Time” for Elon, I expect the bidders to include some of Detroit’s “Big 3.”

    Elon is brilliant in his work, but that doesn’t mean he can’t bite off more than he can chew. Elon has built Tesla on OPM, other people’s money. That works only as long as the stock price stays up, but that is not what is happening.

    1. Spot on if car companies can’t see the opportunity in it then not sure Apple should seek one. It’s a massive enterprise that the god like faith in Musk has kept alive, can you imagine the share price if Apple took over? No it won’t happen unless Cookie has truly lost his remaining marbles. It’s all 2 and 2 equals 5 which in all honesty is my only worry as Cook made a similar calculation recently when talking US/China trade.

    2. Buy Tesla?!? Ford is only worth $39B, and they have $13B in debt already. GM is worth $49B, and they have $13B in debt. Fiat/Chrysler is worth $20B and has $15B in debt.

      Which one of those has the financial muscle to bid for Tesla, which has a market cap of $34B? Factor in bidding from other interested parties, and you would have to pay over $50B for Tesla, not to mention assume their debt of $11B. The “Big 3” maybe interested in Tesla, but none of them can afford it unless Tesla craters.

  2. Apple can make it profitable? Right so how would a Company with no experience in car production make a company that is full of people who have been doing it for years and selling a maturing product range in an increasing competitive market that’s only going to get tougher? Surely apart from throwing money at it it can’t really do much short term, if not a lot longer to actually change much of or even impress its own brand upon it assuming that would even be a positive.

    Let’s be honest Cook is hardly going to inspire its profitable future is he, if it even has one available to it and tell me which dynamic executives will move in to improve matters? Just not sure where Apple can make a difference other than helping with debt which assumes that is the only drag on the business, which I personally doubt, they have done an amazing job but they are operating in a market operating with a high cost base with all manner of new players with deep pockets entering the race against it. It was different in 2013 and Apple would be better working itself slowly into a top end niche player and only expand as market allows using contract builders (like Jaguar is doing as it learns) … and like Apple has done in all its previous products.

  3. Possibly Tesla has some value because of research in batteries, etc, but the “Big 3” and the large import auto companies are catching up REALLY fast in the electric side AND they have so much more going for them in distribution, organization, service networks, parts distribution (search Tesla body parts problem) general experience etc. Why would any other car company have any interest in buying them?

    1. Big 3 are now reduced to the Big 1, which is GM. Ford, now firing thousands of employees in the middle of the Trump Tariff Crash, is only Moderately Big. It makes money from one product line only, its aluminum pickups, which avoided the worst steel tariffs by sheer luck. But they don’t sell well outside the American market. FIAT owns the lowest quality US automaker (Chrysler/Dodge/Jeep/Ram). It’s too early to tell if Trump realizes that Jeep is Italian yet.

      It is difficult to predict which auto manufacturers will survive in the current anti-trade environment. Big money from tech is being shoveled into efforts to remake cars into XL mobile phones, none of which is ready for prime time (if ever). Worldwide automakers may wish they had sat on their money to weather the current trade wars instead.

      British Steel is now bankrupt and struggling British car companies are almost all foreign owned. Even before the Trump trade war, Brits slit their own economic throats.

      Similar problem for Volvo, now Chinese owned. Do tariffs hit only the cars or all the Chinese parts that go into it?

      GM lost a billion last year directly due to inflated steel prices — predicted outcome when propping up globally uncompetitive industry with protectionism.

      Tesla is a dead company walking. Apple won’t save it, Apple will have its hands full saving its own businesses.

      VW is reeling from dieselgate. All the German makes even the ones with assembly plants in America are holding their breath.

      Are Asian makes going to be granted tariff exemptions if they kiss Trump’s ring? Or will everyone in America buy Cadillacs and Buicks?

      All that is just autos. Trains planes and tractors are all looking at a sales cliff too. Either the trade war ends soon or you can write off any profit from IH or John Deere. You can not make money from welfare farmers. All capital intensive global industry will be massively disrupted. I predict bankruptcies, mergers, and layoffs before 2020.

      Can someone tell me if this is great yet?

        1. As I recall, the right wingers like you were disgusted that any automaker got any loans underwritten by the federales. Never mind that the automakers paid back the loans, or that the process was kicked off by the Bush administration—-the “keep government out of all business even when businesses ask for help” crowd wanted all domestic automakers and banks to go bankrupt.

          Now you cheer on a corrupt administration that is screwing businesses and consumers with stupid trade wars and market manipulation, then forking out tens of billions in welfare to only certain sectors of business it thinks are deserving. Who decides what company gets the special tariff exemptions? Why don’t you explain to us all how that works.

          Fscking Hypocrites!

  4. Everyone is so quick to judge! Remember all the proclamations that there was no way Apple, a computer company, could do a smart phone! No experience in phones, etc, blah, blah, blah.

    I don’t know if Apple could make it work or not, but I’ve seen so many knee-jerk reactions like these prove to be so false!

    1. The problem that Apple has is that it has never really run a true hardware-centric service organization. IF Apple had been doing anything real in servicing Enterprise over the past twenty years, it would be a different story.

      But no, Apple doesn’t even sell “Same Day, On Site” service warranty packages for any of its so-called ‘Pro’ hardware. I’d not touch a car from them with anything.

  5. I like Tesla vehicles but what’s the point of Apple running a non-profitable business? Apple needs to stay away from any more hardware products that are going to suck the life out of the company. Let the Big 3 automakers take Tesla and create some mass market for electric cars. Apple will only create some elitist vehicle that almost no one will be able to afford. Wall Street has now put Tesla on its crap list and Apple should stay away from Tesla.

    Tesla may have some technology that Apple can use but those things I don’t know about. I really want Apple to mainly stick with computing hardware and stay away from selling electric vehicles. I personally think if it weren’t for Elon Musk, Tesla would have been out of business years ago. I believe Musk has some sort of cult following due to him being some sort of eccentric genius.

    1. Or you could argue that his mercurial ways screwed it up. I wish i could remember the name and source of the documentary on Tesla that I watched sometime in the last year.

      I have been around production facilities of several kinds ofer the years. What that documentary showed was; the part of the operation where the automated assembly going looked good and efficient.

      (Virtually all car companies have that part worked out…..so…..
      But the rest of it appeared to be disorganized circus operation in what looked like an abandoned airport, hanger looking buildings parts and assemblies with canvas curtains covering the ends of the “hangars” no organized flow.

      The huge parts problem I mentioned in another post. Can’t survive on that. Some collision cars are not even looked at for 3 months before parts are ordered. (maybe because the parts are not available anyway)

      Its hard to tell much from a “documentary” but if I were a potential investor…….I’d be looking for the airport to fly out on.

      I worked for a world wide auto company auto US National Office in Southern California, (big silver building in Torrance near the junction of 3 freeways, they are doing famously well today if that tells you anything)

      The national service manager of Delorean Motor lived across the street from me. They too had big plans to change the automotive world. I also remember the Saturday morning when they auctioned off the assets. He drove to the auction in his company Delorean and drove home in the afternoon in a 63 Volvo 544. Actually a more reliable car. There you go.

  6. Tesla is an insanely overvalued company which is now beginning a death spiral. Not a good name to be associated with. And swoon Musk would add to the nightmare with all sorts of self serving drama.

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