Tesla Motors Inc (TSLA) To Be Bought By GM In 2014: Expert

Tesla Motors Inc (TSLA) To Be Bought By GM In 2014: Expert
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Tesla Motors Inc (NASDAQ:TSLA) seems to have it all right now: a luxury brand nearly everyone loves, a CEO who makes headlines every time he says anything and even plenty of publicity—both good and bad. But many have suggested that CEO Elon Musk may do the same thing to Tesla he did with one of his earliest successes. Instead of staying involved with PayPal for the long haul, he arranged for it to be sold to eBay Inc (NASDAQ:EBAY). Now one expert says he thinks this will happen in 2014, and he thinks he knows who that buyer will be.

GM to Buy Tesla?

Yra Harris of Praxis Trading told CNBC he believes one of the Detroit Big Three might be interested in acquiring Tesla in 2014. In fact, he thinks it will be General Motors Company (NYSE:GM), calling the two companies “such a perfect fit.”

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He said Tesla Motors Inc (NASDAQ:TSLA) has a luxury brand which could go along nicely with the Cadillac brand. GM has said it would be entering the luxury electric vehicle market with a Cadillac-branded luxury EV.

However, he said one thing that could prevent a deal from happening is Tesla’s astronomical valuation.

Tesla’s valuation in “la-la land”

According to Harris, shares of Tesla Motors Inc (NASDAQ:TSLA) are in “la-la land” right now. However, he says if the automaker reaches a reasonable valuation based on growth, he could see Tesla being acquired by General Motors Company (NYSE:GM).

He said Tesla has the technology GM needs and that there’s no reason for GM to recreate that technology. Harris believes that Tesla’s tech, paired with the Tesla luxury brand, has everything GM needs. We heard earlier this year that GM was assembling a team to study Tesla, showing that the automaker was interested in its competitor, although what form that interest may take was not revealed.

In other predictions…

Harris’ other prediction for 2014 was that Goldman Sachs Group, Inc. (NYSE:GS) would take itself private again to get away from the regulation issues which have really begun to weigh on the financial industry right now. He believes the firm will have a “tremendous” bond offering and notes that it is the only company staying alive in the “prop business.”

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