Wall Street is making the case for an Apple-Tesla investment, and the automaker's decision to stay public might force Tesla to make a deal, Loup Ventures analyst Gene Munster said in a blog post.
"If Tesla successfully turns the corner to profitability, the combination of the two companies is nothing more than a fairy tale," Munster said. But, if Tesla continues to burn money, "Apple gains the upper hand."
"Imagine all of the things you love about your iPhone, perfectly integrated with all the things Tesla owners rave about," Munster said. "The two tech giants could take over the auto industry over the next 20 years as consumers embrace electric vehicles and automation."
Both companies prioritize hardware design, software and advancements in artificial intelligence, he said, and Apple undoubtedly has the balance sheet for a deal.
A simple equity investment — Munster, a long-time Apple analyst, pegs it at a theoretical $10 billion — would give Tesla the chance to go private that CEO Elon Musk clearly wants and would slingshot Apple to the forefront of the race to fully autonomous driving.
"Investors would feel that Apple is actually doing something with their cash," Munster said. And, "Apple would not be spending on the impossible, like building its own car to try to catch Tesla. Apple would be investing in making the leader even better."
But there are some hold-ups, Munster said: Mashing together the unique culture of each company would be tricky, and Musk is unlikely to relinquish control.
As for an outright sale: Musk's voting power and love for Tesla makes that hugely improbable, Munster said.
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