Tesla will be acquired within a year, says the NYU professor who predicted Amazon's takeover of Whole Foods
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NYU professor Scott Galloway predicted Amazon would buy Whole Foods before it happened.
In March, NYU professor Scott Galloway made a bold prediction at South by Southwest: this will be the year that Tesla begins to unravel.
Two months later, his claim is starting to look like it could come true. Shares of Elon Musk's electric automaker have plunged more than 35% to trade below $200, while Wall Street analysts worry that underlying demand for the vehicles may have disappeared."I think investors are finally getting fed up," he said on a Recode podcast with Kara Swisher published on Friday. "My prediction is within 12 months Tesla is sub $100 per share and it probably gets acquired because there's real value there."
Tesla did not immediately respond to a request for comment.Most automakers don't have enough cash on hand to be able to shell out the tens of billions for Tesla.
"Even if it goes from $35 billion to $17 billion," Galloway said, adding that bids could include a premium making the deal's value total between $20 billion to $25 billion (still less than Tesla's current $34 billion market value), "there's maybe a couple companies that could buy it: Maybe Toyota, maybe Daimler Benz, but that's a bet the ranch kind of bet."Instead, he's predicting a tech buyout, like the rumors that have circulated for years that Apple once made a bid for Tesla."The guys that could acquire it, that have the balance sheet, are the tech companies but they don't want to go into a low margin business," Galloway continued. "So would Google start to see the car as a platform for more advertising maybe?"
Amazon is also interested in the automotive industry, CEO Jeff Bezos said recently. The company has made a substantial investment in Rivian, a new company building electric SUV's, and has plenty of cash to make another buy ($17 billion on its most recently disclosed balance sheet).
"It's a great brand, it's a great product," Galloway said of Tesla, adding that the major four American automakers likely won't buy it: "They don't have the money."Copyright © 2021. Times Internet Limited. All rights reserved.For reprint rights. Times Syndication Service.
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