Google Could Acquire Tesla For $1,500 Per Share On Its Way To $2 Trillion Stock
In the following analysis, we take a look at why Tesla (NASDAQ:TSLA) could be an attractive acquisition target for Google (NASDAQ:GOOG). We break down our analysis into three parts: what Tesla would stand to gain, what Google would stand to gain, and a scenario where Tesla’s value could rise to $1.5 trillion aided by a deal with Google. Taking into account Google’s current market cap of $1 trillion, the combined entity could be worth north of $2.5 trillion, as we detail below.
What Tesla would stand to gain:
- Google’s software muscle and large cash pile increase Tesla’s chances of executing well in a larger space.
- We outline a case with Google as Tesla’s parent. This could see Tesla grow 11x from its current market cap of close to $135 billion to $1.5 trillion by scaling its production and deliveries to about 8 million units (approaching Volkswagen & Toyota) while monetizing its self-driving technology more broadly by licensing it to other auto-makers.
- Considering that Tesla stock jumped to almost $1,000 last week from ~$500 in less than ten days, and all of this after an already surprising rise from the lows of below $200 less than a year ago, we believe the outliers are not so difficult to imagine.
- In this analysis, we remind investors of risks in the stock, as-well-as provide additional color to the upside case, tying our two outliers analysis together.