Tesla asked Apple to buy it

Elon Musk makes stunning revelation that he reached out to Tim Cook. But guess what happened.

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Tesla vehicles parked in front of Tesla building

Image Source: The Motley Fool

Tesla Inc (NASDAQ: TSLA) chief Elon Musk has made a stunning claim that he once tried to get Apple Inc (NASDAQ: AAPL) to buy his company.

Musk tweeted the recollection on Wednesday morning Australian time.

“During the darkest days of the Model 3 program, I reached out to Tim Cook to discuss the possibility of Apple acquiring Tesla (for 1/10 of our current value),” he said.

“He refused to take the meeting.”

The bomb came the day after Apple revealed its plans to put out an all-electric passenger car to market by 2024.

A merger between the electric vehicle leader and the computing giant would have been a blockbuster deal. Apple is the world’s largest company by market capitalisation while Tesla is ranked 7th.

The combined capitalisation would be US$2.85 trillion as of Wednesday morning.

Bargain of the century?

Cook might have missed the deal of a lifetime, as Tesla shares have been on a tear in 2020.

The car maker’s stock price started at US$86.05 at the start of the year and is now US$640.34 — a 644% increase.

Apple itself hasn’t done badly either, starting 2020 at US$75.09 and trading now at US$131.88. That’s a 76% return for its shareholders.

Apple has been a beneficiary of the reliance on technology during the COVID-19 pandemic.

“[Tech] brands were used as a means of navigating the pandemic as most people opted for technology solutions to work remotely, learn, and keep entertained,” reported Dutch financial comparison site Bankr last week.

“Due to the companies’ ability to offer solutions during the pandemic, their stock rallied, indicating a sign of investor confidence amid economic turmoil.”

Tesla’s rally has been due to the confidence of investors that electric vehicles are the way of the future.

The Motley Fool US also reported that the company also “turned a corner” financially this year.

“It hit an inflection point in which it achieved the scale and developed the manufacturing prowess to start turning a profit,” wrote The Motley Fool US tech specialist Daniel Sparks.

“Consider how Tesla’s free cash flow and net income have improved over the past 12 months. The company has gone from annualised free cash flow and net income of negative US$4 billion and negative US$2 billion respectively one year ago to trailing-12-month (TTM) free cash flow of US$2 billion and TTM net income of US$556 million.”

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Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Apple and Tesla. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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