Saudi PIF in talks to invest in aspiring Tesla rival Lucid

"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, which is different from our understanding on August 8 which was based on Mr. Musk's statement on Twitter", Brinkman said.

Norway's wealth fund, a Tesla investor, said on August 21 that its rules would allow it to stay on as an investor in the carmaker if it delists from the Nasdaq exchange.

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"Our interpretation of subsequent events leads us to believe that funding was not secured for a going private transaction, nor was there any formal proposal", said Brinkman, specifically referring to Musk's blog post on August 13, which said the Saudi Arabian Sovereign Wealth Fund (PIF) was asking Tesla for details on how the company would be taken private.

Lisa Shalett head of investment and portfolio strategies at Morgan Stanley Investment Management Inc. listens during a Bloomberg Television interview in New York U.S. on Tuesday Aug. 7 2018. Shalett said that emerging markets are very close to endin
Lisa Shalett head of investment and portfolio strategies at Morgan Stanley Investment Management. Bloomberg

Reuters said the talks between privately-held Lucid Motors and PIF illustrated the latter's willingness to invest in electric auto makers to diversify the oil-rich Middle Eastern kingdom's investment portfolio and would also be more in line with PIF's limited resources, given that, despite its US$250bn in assets, it has already made substantial commitments to other technology companies or investments.

Shares of Palo Alto, California-based Tesla rose to a high of $324.79 on August 21, bouncing off a three-month low on August 20 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.

Tesla's (NASDAQ:TSLA) stock price accelerated again to the downside in early Monday trading, after JP Morgan (NYSE:JPM) analyst Ryan Brinkman slashed his price target on the name to $195 from $308, telling clients that Elon Musk's privatization proposal "appears much less developed". Year-to-date, TSLA has declined -1.88%, versus a 7.73% rise in the benchmark S&P 500 index during the same period. Free for 14 days - no credit card required!

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  • Kyle Peterson