Should Tesla Try To Acquire Ford Or GM In 2021?

Cars Parked In Front Of Company Building

Every week, Benzinga conducts a survey to collect sentiment on what traders are most excited about, interested in or thinking about as they manage and build their personal portfolios.

This week we posed the following question related to Tesla acquiring a legacy automaker:

Over the next year, should Tesla acquire Ford or GM, or neither?

  • Ford Motor Company (NYSE:F)

  • General Motors Company (NYSE:GM)

  • Neither

Founded in 2003, the electric vehicle-maker Tesla Inc (Nasdaq:TSLA) debuted its Tesla Roadster in 2008 and followed that with the Model S in 2012, Model X in 2015, Model 3 in 2017 and Model Y in 2020.

Tesla also sells solar panels and solar roofs, as well as batteries for energy storage.

The idea might seem outlandish at first, but market-capitalization comparisons invite the topic for discussion.

At an Alex Springer conference in Berlin in December, CEO and co-founder Elon Musk touched on the idea of buying a legacy automotive company.

“Well, I think we’re definitely not going to launch a hostile takeover,” Musk said. “So I suppose if there was a friendly one, if somebody said, ‘Hey, we think it would be a good idea to merge with Tesla,’ we certainly could have that conversation. But, you know, we don’t want it to be a hostile takeover sort of situation.”

See Also: How To Buy Tesla Stock.

At the time Musk made the statement, Tesla’s market cap was around $500 billion.

Tesla’s market cap now is $750 billion, over six times greater than that of Ford ($41 billion) and General Motors ($72 billion) combined.

Tesla was also completely unfazed by the COVID-19 pandemic sell-off, and its late-2020 addition to the S&P 500 once again pushed the stock to new all-time highs of $900.40 in early 2021. That price corresponds to $4,502 on a pre-split basis.

This week’s study found 40% of traders and investors saying Tesla should not try to leverage its market cap in an attempt do an M&A deal with Ford or GM in 2021.

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Paul McGee 1 month ago Member's comment

Lol. More like one of them buy Tesla out.

Paper Genius 1 month ago Member's comment

With what Money? Both #Ford and #GM are sitting on more than $100B in debt!

Rebecca Duncan 1 month ago Member's comment

No! Way too much debt on both those companies. Wait for the next bankruptcy and buy what's left.

Dave Schneider 1 month ago Member's comment

Doing that will be a disaster. Retooling cost, union bags, legacy dealerships, too many negative things to make any deal work.

Harry Sinclair 1 month ago Member's comment

A company that makes no profit on cars after 11 years of production to buy two companies who do make a profit with a market cap way below #Tesla? Now that's funny. Tesla will be bankrupt in 2024 unless they start making a profit.

Bindi Dhaduk 1 month ago Member's comment

Tesla did finally make a profit!

Harry Sinclair 1 month ago Member's comment

Yeah, but not from selling cars! From regulatory credits:

edition.cnn.com/.../index.html

Jacob Paterson 1 month ago Member's comment

Acquire #Ford or #GM? No! What on Earth for? $TSLA

John D. Singleton 1 month ago Member's comment

To kill Ford once and for all.