Tesla's Undisclosed SEC Probe Is 'Just A Rumor'

Tesla Motors Inc TSLA is rumored to have an undisclosed SEC probe. Investors initially responded to the news by selling a few shares at market open, but the company quickly rebounded and rose less than 1 percent. Thus far, analysts aren't worried about the report, which analysts classified as a rumor at best. "We're still looking into it," Baird analyst Ben Kallo told Benzinga this morning. "So far, all it is…is a rumor to me." Without more concrete information, Global Equities Research analyst Trip Chowdhry said he didn't have anything to say about the rumor. Instead, he turned the conversation to Tesla's negative working capital. "What that means is their customers are paying much before they have to pay to the suppliers," Chowdhry told Benzinga. "This is a very strong [position to be in]. None of the other manufacturing companies have negative working capital. [Tesla] will never have to raise money. Demand is outstripping supply."

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BMW Collaboration

Tesla is once again expected to collaborate with BMW. "Obviously Tesla is looking to collaborate on charging stations to help develop that network and to increase the overall network of the fast-charging technology," said Kallo. "BMW has…been making a movement toward the EV market. [Tesla] would be a likely partner to help shoulder some of the infrastructure [burden]." Kallo thinks it would be a "positive" move for Tesla to "work with a competitor like BMW." "The fact that this is being reported in Germany gives it a little bit more credibility than previous discussions around the two companies meeting together," Kallo added. "I think Tesla is looking to keep all options [open] when they're partnering with different [companies]."

'Go-To Source'

Chowdhry thinks that it is very likely that Tesla and BMW will collaborate on battery technology. He said Tesla's Gigafactory would be the "go-to source" for other manufacturers to get their batteries. "[BMW] still needs to get their batteries," said Chowdhry. "Getting their batteries from Tesla is a natural outcome. No other company in the world will have the production capacity or the chemistry." Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.