'Tesla needs to prove success is sustainable and that it is based on a solid financial foundation. If they do, they should be an appealing takeover target.'

Buried in the loan agreement text between Tesla Motors and the US Department of Energy were restrictions on the automaker's ability to offer itself for sale. Now that the loan has been paid back early, speculation is ramping up that the company will get snagged by a bigger fish through a sale or a takeover. Bloomberg, in fact, is wondering aloud if Google will take the bait.

Now, before anyone gets all excited that the giant touchscreen in the Model S will get a clever logo redesign every holiday, we've heard unlikely rumors about other companies buying Tesla before (for example, Google's competition, Apple) and Tesla CEO Elon Musk has said repeatedly that he isn't going to step down any time soon. In fact, he told Bloomberg last month, "I've said from the very beginning, from the creation of Tesla, that our goal is to create a compelling mass-market car. I would not consider stepping away from Tesla until we're there. We're several years away obviously."

Right now might be a bad time to buy the company anyway, given TSLA stock's high value (over $100 today). In fact, Bloomberg has calculated that Tesla is trading for 816 times(!) its estimated 2013 earnings. If things continue to go well, money-laden companies like Google or another automaker might be interested in the EV builder. The former deputy CEO of Chrysler and onetime Toyota dealer body guru, Jim Press, told Bloomberg that, "Tesla has developed an appealing and credible product with game-changing technology. They need to prove their success is sustainable for the long term and that it is based on a solid financial foundation. If they do, they should be an appealing takeover target."

Currently, Musk controls about 24-percent of Tesla shares. There are more details in the Bloomberg article here and there's a video bit of speculation below.





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    • 1 Second Ago
  • 131 Comments
      Rotation
      • 1 Year Ago
      Buying Tesla at near all-time high would be a bold move. Given the premium for takeovers, they'd probably go for $150/share or more. Of course, for a buyer who is truly convinced that Tesla has no where to go but up, there is no time better than the present to buy in.
        recharged95
        • 23 Hours Ago
        @Rotation
        It all about the balance sheet. If there's a good backlog of orders, and a steady climb in annual revenues, they will sell out. I mean the investors(including Musk) spent a hell of an amount of cash to start and *sustain* the company. In Silicon Valley, you either shed the sweat, blood & tears and go big to sell.... or go do nothing (aka Facebook, Google itself at the beginning and take over the world. With the amount of investment put into this company at the beginning--the ROI will take a decade or so to recover at the current rate. Telsa will sell.
          Rotation
          • 23 Hours Ago
          @recharged95
          recharged95: No, it depends on how much you are paying too. Don't bring Silicon Valley into this. Venture Capitalists are scum and by the way are getting a terrible ROI lately. And that's even with the ability to make a profit selling some complete garbage like Zynga to the public.
      ebauer427
      • 1 Year Ago
      If Google buys Tesla I no longer want one. No way will I buy a car from Google.
      Brian Rautio
      • 1 Year Ago
      I do recall Musk saying something before the Model S was released about how...and I'm of course paraphrasing...there were some bad seeds that he had to weed out from the upper echelons of the company and he was sad that he had to "stick around" as CEO to take care of that. Tesla is certainly in way better shape now then when he said that and his outlook seems to have changed, so I'm not worried that they'll sell, but I can see where the rumors come from.
      Sea Urchin
      • 1 Year Ago
      I'd love to see Google buy them, Google has the clout to take on dealers (see article from earlier today) Google would shake up the industry and force carmakers to sell cars differently, package them differently, and basically change everything about the car owning, buying and maintaining experience.
        archos
        • 23 Hours Ago
        @Sea Urchin
        How would google force anything, on anybody? Clout? They're also going to buy auto suppliers? Then what clout? A search engine? Nexus cell phones?
        Bernard
        • 23 Hours Ago
        @Sea Urchin
        Google doesn't know the auto industry. Google has clout but their culture is centered around information technology and their understanding and influence in other sectors is not that great.
        Grendal
        • 23 Hours Ago
        @Sea Urchin
        Elon's got enough billions to crush the dealership network if he really has to.
      Myself
      • 1 Year Ago
      Since sickening levels of forced advertising and driving do not mix, in other words, projecting ads HUD style would be too distracting, Google will not buy Tesla.
        Bernard
        • 23 Hours Ago
        @Myself
        Google wants to make self driving cars, so driver distraction issues would be moot. The computer will be the driver.
      Grendal
      • 23 Hours Ago
      Off topic but Tesla related: North Carolina drops it's anti-Tesla bill: http://www.newsobserver.com/2013/06/25/2989207/nc-legislators-drop-bid-to-curb.html
      Street King
      • 23 Hours Ago
      Negative
      Dreez28
      • 1 Year Ago
      Lets hope for the sake of Tesla, this doesn't happen. The company is poised to be majorly successful and intergral to bringing about major auto industry, as well as Department of Transportation changes, in the coming years. Making Tesla answerable to some mega corporation would be a huge tragedy to this country.
        kEiThZ
        • 23 Hours Ago
        @Dreez28
        Google would be one investor who could protect Tesla from the vultures that would be other carmakers and/or oilcos.
          Dreez28
          • 23 Hours Ago
          @kEiThZ
          I think Tesla has overcame it's most major adversary...public perception/opinion. Other car makers and oil companies have no power without public support, because they depend upon the public for profit.
          kEiThZ
          • 23 Hours Ago
          @kEiThZ
          Why would it be a pump and dump? There are mutual benefits even if it's not obvious. Other than giving Google a brand to put a halo around their automotive software and services, it also blocks out all competition. Imagine for a second that Google becomes embedded in Tesla and Tesla become really popular...but they don't play well with Apple's services. No in-car Siri for example. At the same time, Google's goals on green energy, driverless cars, and a whole host of other interests get advanced. Tesla benefits from not having to respond to the whims of bankers and stock market analysts. Elon gets to run the firm like he wants with a solid capital partner. And when Google's ready to get out, they sell their stake and leave Elon with an ever larger controlling interest than today. Imagine what that does for Tesla. Alternatively, Google buys 25% and together with Elon's 26%, they come to control and protect Tesla by largely becoming a silent partner subordinate to Elon's decisions.
          archos
          • 23 Hours Ago
          @kEiThZ
          Doubt it. Sounds like a pump and dump scheme. A very expensive one that could leave Tesla bunk and Google's brand more hated than Monsanto.
      kEiThZ
      • 23 Hours Ago
      Somebody trying to engineer an epic short squeeze a la VW....
      EZEE
      • 1 Year Ago
      Google's purchase of Motorola worked out. All of ow using Motorola phones...
        archos
        • 23 Hours Ago
        @EZEE
        I think Apple should buy Starbucks too. Since people use laptops at starbucks. And Walmart should buy an airliner, because something something something. This takeover talk sounds really dumb, but I'm sure its going to keep a nice cushion in the their stock for the time being.
        kEiThZ
        • 23 Hours Ago
        @EZEE
        Motorola had to clear what was in the pipeline. Watch for what Moto does in the Fall or in 2014. That will tell you about Google control.
        SublimeKnight
        • 23 Hours Ago
        @EZEE
        That's kind of a bad example as Moto was bought for their patent portfolio. When Google saw their roadmaps, they told them to scrap everything that they were working on, because they were destined to be forever 1-2 years behind the industry. Moto will be putting out their first phone under Google's direction in a month or two. We'll see how it all worked out then.
      Grendal
      • 23 Hours Ago
      But if it takes 5 to 10 years for the major manufacturers to catch up then Tesla should be solidly in place as the market leader and go to company for EV technology. If they come in at 3 to 5 years then they might have a chance to kill Tesla's momentum.
      archos
      • 23 Hours Ago
      Its pretty funny you think being an investor equates to leading the company's business. Let me school you. It does not.
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