What Could Happen To Tesla Stock In A Merger With General Motors

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What Could Happen To Tesla Stock In A Merger With General Motors

seekingalpha2021-01-22

Summary Tesla has demonstrated a remarkable capacity to raise capital based on widespread investor conviction that electric-powered vehicles (EVs) will overtake and replace internal combustion ...

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Sandy92
·2021-01-24
Not sure if it's likely
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JYP
·2021-01-23
Too much incumbent for ICE to transform fast enough
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hold住姐
·2021-01-22
Unlikely
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yellowtigger
·2021-01-22
Unlikely will merge
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车厘子tomato
·2021-01-22
Are they merging?
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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nWhat Could Happen To Tesla Stock In A Merger With General Motors\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-01-22 15:17 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4400304-what-happen-to-tesla-stock-in-merger-general-motors><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nTesla has demonstrated a remarkable capacity to raise capital based on widespread investor conviction that electric-powered vehicles (EVs) will overtake and replace internal combustion ...</p>\n\n<a href=\"https://seekingalpha.com/article/4400304-what-happen-to-tesla-stock-in-merger-general-motors\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"TSLA","symbol_name":"特斯拉","start_time":0,"source_url":"https://seekingalpha.com/article/4400304-what-happen-to-tesla-stock-in-merger-general-motors","article_id":"1137880687","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1137880687","pubTimestamp":1611299825,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Summary\n\nTesla has demonstrated a remarkable capacity to raise capital based on widespread investor ","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"TSLA":"特斯拉","GM":"通用汽车"},"translate_title":"特斯拉与通用汽车合并后的股票会发生什么变化","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"GM":0.9,"TSLA":0.9},"content_text":"Summary\n\nTesla has demonstrated a remarkable capacity to raise capital based on widespread investor conviction that electric-powered vehicles (EVs) will overtake and replace internal combustion engines.\n\n\nGM post-bankrutpcy has proven its financial sustainability and is dedicated, like Tesla, to an electrified future.\n\n\nThe strengths and weaknesses of the two automakers are complementary, arguing for a combination that would be a win for shareholders, employees, and governments with policies aimed toward electrified mobility.\n\nShortly after the New Year, Blackstone’s Byron Wien and Joe Zidle issued their list of Ten Surprises for 2021, predictions they say will have a better than 50% likelihood of happening, even though most investors don’t think so. The pair threw in a few “also rans” that didn’t quite make the top ten surprises, among themthe prediction that Tesla will buy a major automaker.\nWhether Tesla Inc.’s(NASDAQ:TSLA)CEO Elon Musk would entertain such a move is questionable, as are any predictions relating to the preternaturally unpredictable leader. I guess the idea has to have crossed his mind, since it makes a lot of sense as a strategy to - please forgive the expression – turbocharge growth and is achievable, given his company’s market capitalization of about $783 billion. Should he be considering a major automotive acquisition, the most logical candidate for several reasons is General Motors Co.(NYSE:GM).\nHe might be considering a non-automotive acquisition, a software or chip manufacturer for example, which would make sense for a maker of increasingly electrified vehicles. The point is that Tesla's immense market capitalization makes it a potential acquirer of all but a few companies.\nWhat could happen to Tesla's share price in the event of a merger proposal with GM or any other automaker is an important factor for investors to consider. Some Tesla owners no doubt would consider a GM merger a betrayal of Tesla's (and Musk's) electric-only approach to mobility. Skeptics might blanch at the notion of infecting Tesla's nimble (and sometimes incautious) tech culture with GM's slower and risk-averse tendencies. The forces that have propelled Tesla stock skyward could suddenly be turned on their head.\nGM likely would spurn a Tesla proposal to merge, as it has in the past with the Nissan Renault alliance and others. Whether GM could resist Tesla, assuming the latter’s interest was determined, is problematic. The GM board would be legally bound to consider the opportunity to trade GM shares for Tesla at a premium. Such a combination would prove quite attractive to holders of GM stock, which – even considering the latest run-up in its price – isn’t paying a dividend and has managed only 46% since going public in 2010 following bankruptcy reorganization.\nGM stock since 2010 vs SPY and DJIA Source: Yahoo Finance\nBoth sides potentially benefit\nA practical combination of the two companies isn’t too hard to visualize, though their histories and profiles are dissimilar:\n\nTesla a Silicon Valley startup barely twenty years old and GM a century-old incumbent;\nTesla the fake-it-till-you-make-it, software-heavy enemy of fossil fuels; GM, an engineering and manufacturing giant that depends on sales of gas-consuming pickup trucks and SUVs while pivoting recently toward an all-EV future;\nTesla, which distributes vehicles directly to consumers without spending a penny on advertising; GM, which maintains a network of franchised dealers and spent roughly $3 billion in advertising in 2019, according to Statista.\nFinally, non-union Tesla in contrast to GM, whose relationship with the United Auto Workers has been marked by conflict – a 40-day strike in 2019 that cost the company $4 billion the latest example.\n\nYet GM has assets that could pay off immediately for Tesla, notably a worldwide manufacturing and components infrastructure capable of building upwards of 8 million vehicles a year. GM can be fairly criticized for its slowness to recognize consumer trends and its mediocre marketing initiatives – but no one can fault GM for its expertise in high-quality, swift mass manufacture of vehicles. By merging GM into its operations, Tesla would instantly acquire some of the best factories in the world and a production capacity that could immediately vault it to the front rank of global automakers. GM’s new Ultium battery venture with South Korea’s LG Chem is about to supply the power source for 20 new GM EVs through 2025. A strategic review would sort out which vehicles would be sold as Teslas, which as Chevrolets – and perhaps which GM brands might be phased out.\nGM’s highly profitable gasoline-powered trucks and SUVs, and the enormous cash flow they generate, will be around for a long time. Musk may be an enemy of fossil fuels; his practical financial side would tell him that until EV pickups prove popular to everyday consumers as well as to carpenters and ranchers, Chevrolet Silverado and GMC Sierra and their SUV counterparts will maintain their status as key products. But perhaps a new luxury division could emerge combining future Cadillac EVs with the high-end Teslas like the Model S that have proven to be status symbols among affluent consumers but are now outdated.\nUndeniably, Tesla has evolved into an exceptionally powerful global brand. A decade ago, I was among the naysayers who believed that the company eventually was likely to fail or to be snapped up by a larger competitor. I’ve moved to neutral: Over the past ten years, Musk has proven a remarkably influential figure in high tech, able to command the allegiance of investors and customers in the same way that the late Steve Jobs and Bill Gates did in their time. Yes, he’s missed many of his stated forecasts for the number of vehicles he will build and sell; and, yes, some of his shenanigans with regard to social media and infractions of securities regulations have raised legitimate worries about his stability. Yet what Tesla has managed to achieve – more than one million EVs built and sold through March of 2020 – stands as a testament to corporate tenacity as well as a harbinger of EVs growing role in mobility.\nTesla operates an antiquated former GM assembly plant in Fremont, California and a new assembly plant in Shanghai, with another under construction in Berlin and one planned for Austin, Texas.\nEVs are a game of capital\nTesla’s extraordinary ability to raise capital hasn’t gone unnoticed at GM headquarters, which has taken steps toward adopting the smaller rival’s EV strategy as its own. In 2017, CEO Mary Barra unveiled the three zeros: “zero crashes, zero emissions, zero congestion,” a slogan signaling GM’s shift toward EVs as well as to autonomous driving. It was a signal that GM recognized the world was heading toward a future for mobility that Tesla – and others, like Google(NASDAQ:GOOG)(NASDAQ:GOOGL)- were helping to define. The No. 1 automaker in the U.S., in terms of sales, also realizes that its identity and legacy are no longer the advantage that they once were. A few weeks ago, GM unveiled a new corporate logo, meant to resonate with younger, more connected audience. GM’s Cruise autonomous driving unit has maintained distance from the majority-owning parent corporation, taking up residence in San Francisco and seeking capital investment from outside GM. Equity analysts have wondered aloud whether GM is considering a spinoff of Cruise, a possibility that Barra hasn’t ruled out.\nGM is no basket case\nWhile GM engineers work to develop better, cheaper, smaller batteries to make EV more practical for mainstream buyers, the ability to raise massive amounts of capital give Tesla one sizable advantage over its larger rival: staying power. The reason for GM’s recent rise in stock price, after a long decade in the doldrums, may have to do with the automaker’s having proved it was able to withstand 2020’s 12% drop in U.S. vehicle sales, brought on by the pandemic, without heavy additional borrowing. Following bankruptcy, some equity analysts said GM must prove it could weather a sales downturn without suffering a credit crisis.\nAnother possible reason for interest in GM stock is the realization that the automaker is making a $27 billion bet on EVs that could pay off if the mass market quickly adopts the technology.\nA merger with GM would bring less obvious benefits to Tesla: A worldwide dealer network that would be only too pleased to service Tesla vehicles as they develop their own electrification tools and know-how. Also: OnStar, GM’s over-the-air safety and convenience feature. GM’s parts depots, supply network and supplier relationships.\nThe tie-up of these two companies under the Tesla corporate umbrella, with GM advancing toward an electrified, self-driving future, could be a formidable powerhouse rewarding shareholders, customers, dealers and the global policymakers that are encouraging and dictating the curtailment of fossil fuels.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":319044404,"gmtCreate":1611453404508,"gmtModify":1704860305556,"author":{"id":"3563504647645776","authorId":"3563504647645776","name":"Sandy92","avatar":"https://static.tigerbbs.com/9f86355f6dbed4dfca34d989df1a36e1","vip":1,"hat":"https://static.tigerbbs.com/50a4c8d97279fa9f8f1fa9749a6bdff4","crmLevel":8,"crmLevelSwitch":0,"idStr":"3563504647645776","authorIdStr":"3563504647645776"},"htmlText":"Not sure if it's likely&nbsp;","listText":"Not sure if it's likely&nbsp;","text":"Not sure if it's likely","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/319044404","repostId":1137880687,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":310777352,"gmtCreate":1611392552776,"gmtModify":1704860183423,"author":{"id":"3574383960851394","authorId":"3574383960851394","name":"JYP","avatar":"https://static.tigerbbs.com/a0df3eb8c19e40b06b9a7b5d13f276c1","vip":1,"crmLevel":5,"crmLevelSwitch":0,"idStr":"3574383960851394","authorIdStr":"3574383960851394"},"htmlText":"Too much incumbent for ICE to transform fast enough&nbsp;","listText":"Too much incumbent for ICE to transform fast enough&nbsp;","text":"Too much incumbent for ICE to transform fast enough","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/310777352","repostId":1137880687,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":310897619,"gmtCreate":1611301021931,"gmtModify":1704859406237,"author":{"id":"3570262317958188","authorId":"3570262317958188","name":"hold住姐","avatar":"https://static.tigerbbs.com/1e0f4a1ee1426ea239e4dd2ca6b23b38","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3570262317958188","authorIdStr":"3570262317958188"},"htmlText":"Unlikely","listText":"Unlikely","text":"Unlikely","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/310897619","repostId":1137880687,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":310894451,"gmtCreate":1611300807573,"gmtModify":1704859403551,"author":{"id":"3565581100857882","authorId":"3565581100857882","name":"yellowtigger","avatar":"https://static.tigerbbs.com/4d6c10f946de824baf1329eb7dde4882","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3565581100857882","authorIdStr":"3565581100857882"},"htmlText":"Unlikely will merge","listText":"Unlikely will merge","text":"Unlikely will merge","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/310894451","repostId":1137880687,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":310895810,"gmtCreate":1611300512330,"gmtModify":1704859401925,"author":{"id":"3555414544558416","authorId":"3555414544558416","name":"车厘子tomato","avatar":"https://static.tigerbbs.com/a6dbabc7e37fc0d611c52a5194f61d58","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3555414544558416","authorIdStr":"3555414544558416"},"htmlText":"Are they merging?","listText":"Are they merging?","text":"Are they merging?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/310895810","repostId":1137880687,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":7,"commentSize":5,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}