Morning Commentary: Tesla Motors’ convertible bonds head higher as analysts speculate on future

By Stephanie N. Rotondo

Seattle, July 12 – Tesla Motors Inc. was trading actively – and better – in the convertible bond market on Tuesday.

The gains came as Morgan Stanley analysts speculated on what Elon Musk’s new “secret master plan” could be. In their opinion, Musk could very well be looking at repositioning his auto company into a public transport company – a move the analysts believe the company is well positioned for.

The 1.25% convertible notes due 2021 were trading in an 84.75 to 84.875 context at midday. That compared to a stock price (Nasdaq: TSLA) of $226.06.

The equity was up $1.28.

The gains also came despite reports that the Securities and Exchange Commission was investigating the company over a potential breach of securities laws. The probe centers on a May 7 crash involving a Tesla vehicle that was driving on auto-pilot. The accident killed the driver.

While Tesla did notify the National Highway Traffic Safety Administration of the incident, it failed to disclose the information to investors.

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