Tesla surges after Morgan Stanley becomes the second Wall Street bank to drop coverage of the stock, Business Insider

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Markets Insider

Tesla stock price private

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Markets Insider

Shares of Tesla spiked as much as 5% Tuesday morning after Morgan Stanley became the second Wall Street bank to restrict its coverage of the stock and remove its price target. It could be a sign that Elon Musk is making progress in his bid to take the electric-car maker private.

Goldman Sachs dropped coverage last week, as is typical when a bank’s investment banking division is hired by a company its equity research department covers. The two departments are legally divided by a so-called Chinese wall that prevents the two divisions from conflicts-of-interest.

Also on Tuesday, new documents reported on by Business Insider’s Linette Lopez showed the grueling way Tesla reached its goal of producing 5,000 Model 3 sedans per week. Of the 5,000 produced in the last week of June, 4,300 required rework, the documents show.

And finally, In a video factory tour with YouTube star Marques Brownlee published early Tuesday, CEO Elon Musk said Tesla may be able to produce an electric car for $25,000, but that it would take three years to get there.

“I think in order for us to get up to…a 25,000 car, that’s something we can do,” he said. “If we work really hard, I think maybe we can do that in three years.”

He added that design and technology improvements are the keys to affordability, but that scale of production plays an important role as well.

Tesla’s stock price has whipsawed in the two weeks since Musk first tweeted his plan to take Tesla private at $420 a share. After initially skyrocketing to $389 -near record highs – shares briefly fell back below $300 on Monday following a slew of securities fraud lawsuits and a reported subpoena from the Securities and Exchange Commission.

Shares are currently trading 32% below Musk’s target of $420 per share.

Read more about Tesla’s bid to go-private:

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