“Given improvements in efficiency and upcoming expansion plans, Mr. Musk admitted that from today’s perspective there is ‘some merit’ to raising capital,” Morgan Stanley analyst Adam Jonas said in a note to investors. Jonas is widely followed on Wall Street as an early authority on both Tesla and electric vehicles.
Morgan Stanley forecasts Tesla will raise $2.5 billion in the third quarter of this year, coming “from strategic sources,” Jonas said. The firm has a $240 a share price target on Tesla’s stock, as Jonas said “concerns over demand and liquidity” will weigh on the stock.
“We think Tesla is waiting to demonstrate a recovery in demand and cash flow before looking to stabilize its balance sheet,” Jonas added.
Tesla’s stock fell 1% in premarket trading from Wednesday’s close of $258.66 a share.