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Rumors Swirl that Google Might Purchase Tesla Motors
Bloomberg got the rumor mill running with a recent article speculating about whether Google might have eyes for high-end electric vehicle manufacturer Tesla Motors. The Palo Alto-based car company was able to pay off its US government loan nine years early. Only ten years old, Tesla has managed to trade at 816 times its estimated 2013 earnings, and may be attractive to a certain tech giant with a lot of cash. The company’s initial offerings began at $17 a share back in 2010, and have surpassed $99.50 as of this month. However, would CEO Elon Musk be willing to part with his pet project just as it seems to be making some serious headway?
Google has already made some high-profile acquisitions that fall outside of the strict realm of information technology. With over 127 companies under its famous moniker, Google has branched out into making smartphones, developing self-driving vehicles, high-tech eyewear, and even a kite wind power startup. While Google certainly has enough money, Tesla has a market worth of close to $12 billion, which might be a steep sticker price even for Google. Musk himself owns 24 percent in his company and has remarked to Bloomberg in an interview, “I’ve said from the very beginning, from the creation of Tesla, that our goal is to create a compelling mass-market car,” Musk said. “I would not consider stepping away from Tesla until we’re there,” he added. “We’re several years away obviously.”
So, as Tesla is investing in building more charging stations and bringing the price of its $69,000 model S sedan a little closer to becoming affordable for the middle class, Wall Street is doing its best to predict a number of possible outcomes for their future. Musk could either stay put, or partner with Google and take the company private while still retaining his position as CEO. However, Musk has reportedly bought even more shares in Tesla, pointing to a confidence that more success is on the horizon, and that at that point he could take his business past the reaches of Google. Considering California’s ever stricter standards on emissions, an electric car could very soon become extremely appealing, assuming that it could become available to the mass market. Just like Google, Tesla might just be an brand in the making, and it would be foolish to do anything but ride an upwards trajectory to success.
Without any concrete answers from the heads of either Google or Tesla, the whole issue remains the product of guesswork. Where would you place your bets?
Images via Tesla Motors.
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