Morgan Stanley halts research coverage of Tesla, shares rise
Brokerage Morgan Stanley has suspended equity coverage on Tesla Inc, hinting that the U.S. bank may be doing business directly with the company as it explores options to go private, pushing the electric carmaker`s shares up as much as 5 percent on Tuesday.
Morgan Stanley`s move comes a week after Goldman Sachs Group Inc stopped its coverage of Tesla last week shortly before confirming it was acting as a financial adviser on a matter related to the automaker.
Morgan Stanley`s website showed Tesla had been moved to "Not Rated" from "Equal-weight" on Tuesday without providing further details on the reason for dropping coverage.
Shares of Palo Alto, California-based Tesla rose to a high of $324.79 on Tuesday, bouncing off a three-month low on Monday when JP Morgan slashed its price target on the company by $113 and said it believed Chief Executive Elon Musk had not secured funding for taking Tesla private.
Musk had tweeted early last week that he was working with buyout firm Silver Lake and investment bank Goldman Sachs as advisers in his efforts to secure tens of billions of dollars in funding and take the car maker private.
Morgan Stanley declined to comment, while Tesla did not respond to a request for comment.
Norway`s wealth fund, a Tesla investor, said on Tuesday that its rules would allow it to stay on as an investor in the carmaker if it delists from the Nasdaq exchange.
Musk has given no details of funding since saying in a blog on Tesla`s website a week ago that he was in discussions with Saudi Arabia`s sovereign wealth fund and other potential backers but that financing was not yet nailed down.
His tweet earlier this month that he was considering taking Tesla private and that he had secured funding prompted investor lawsuits as well as an investigation by the U.S. Securities and Exchange Commission.
Separately, Musk, a prolific Twitter user with 22.4 million followers, deleted his Instagram account, which had about 8 million followers.
Musk has been criticized for his erratic behavior on social media, with some investors urging him to refrain from making controversial comments.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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