Apple tried to buy Tesla in 2013 for a reported $240 per share — more than Tesla is trading for today.
This week has brought a significant downturn for Tesla stock. At the time of writing, Tesla stock was around $195 but had dipped as low as $187 per share earlier in the day. While the stock slump is news in and of itself, it highlights another more compelling news story from the week: Apple tried to buy Tesla for $240 per share back in 2013.
According to a report from CNBC, Tesla co-founder and CEO Elon Musk met with Apple’s head of mergers about the deal — and perhaps even Apple CEO Tim Cook.
“Around 2013, there was a serious bid from Apple at around $240 a share,” Craig Irwin, an analyst at Roth Capital Partners, said in an interview on CNBC’s “Squawk Box.” “This is something we did multiple checks on. I have complete confidence that this is accurate. Apple bid for Tesla. I don’t know if it got to a formal paperwork stage, but I know from multiple different sources that this was very credible.”
Apparently, the deal fell through because, as a part of the agreement, Apple wanted Musk to step away from the company. Musk wasn’t willing to relinquish the Tesla helm. So, the transaction was jettisoned. That fact is not insignificant. So, I’ll circle back in a moment.
Given the fact that Tesla stock is on the slide, and one analyst predicted it could go as low as $10 per share, there might be more appetite for renewed deal discussions with Apple. Although Tesla stock once hit a high of $385, it’s well below that now. So, it could be tempting for the Tesla board to accept an offer above its current valuation.
That said, Tesla still has a nearly $36 billion market cap. The most Apple ever paid for a company was when it acquired Beats Electronics for $3 billion in 2014. Accordingly, Apple investors might not love shelling out for Tesla, especially given its current financial woes.
In the years since this supposed sale talks, however, Apple has gained ground with its own automotive team, codenamed Project Titan. In fact, it recently patented two self-driving vehicle sensor systems. Plus, last winter, Apple hired away Tesla’s VP of Engineering. So, maybe Apple doesn’t need Tesla anymore.
In considering another Tesla buyout by Apple, though, one has to analyze the cost benefit of kicking Musk to the curb during the deal. Certainly, Musk is a liability with this Trumpian Twitter antics, which have recently gotten him in trouble with the Securities and Exchange Commission (SEC). However, I’d argue that Musk is as essential to Tesla as Jobs was to Apple.
I really don’t believe that people are buying Teslas because of Tesla. Rather, they want to invest in, and be a part of, the Musk brand. He’s globally seen as a future-forward visionary. And affluent buyers are eager to buy into that and bask in that shared glory.
I mean, without the cult of Elon at the Tesla helm, what is the company really? It’s a floundering pure-electric luxury car brand that is burning cash like its going out of style. It is failing to deliver products on time. And the cars it is capable of producing are rife with reliability problems. Granted, Musk’s self-admitted hubris has gotten the brand into more hot water than it would have without him. Still, he’s the face of the brand.
With Musk and Tesla being indelibly intertwined, and the fact that Apple has syphoned off some of Telsa’s best brain power, I don’t think a new Apple and Tesla deal will ever happen. Tesla and its leader are too much of a liability. Apple would be better off going about the car game on its own.