We learned yesterday that Apple tried to buy Tesla, at least according to an analyst who insists his sources are solid, and that it was willing to pay a substantial premium over what the public markets said the company was worth--but only under one condition.

What stopped it from happening, according to Craig Irwin of Roth Capital Partners, who first was interviewed on CNBC's Squawk Box and later followed up with the network via email, was that "Apple wanted Elon Musk to step away, and that was a deal killer."

Earlier, Irwin had cited the attempted Apple acquisition, which he said happened in "around 2013," as an explanation for why he's bullish on Tesla now.

Irwin said he figures that if Apple was willing to buy in 2013, it would probably be willing to do so now, too, even though Musk told his company's employees in an email last week that Tesla only has enough cash left to last another 10 months.

Here's how Irwin described the reported deal attempt six years ago:

Around 2013, there was a serious bid from Apple at around $240 a share. This is something we did multiple checks on. I have complete confidence that this is accurate. Apple bid for Tesla.

I don't know if it got to a formal paperwork stage, but I know from multiple different sources that this was very credible.

I've tried to get comment from either Apple or Tesla, along with Irwin, but I've received no reply. It's not the first ever report about Apple being interested in Tesla, although it's by far the most detailed I've seen.

If it's right, however, I'm both fascinated by how long the details stayed secret, and by the story that the numbers would tell. To deconstruct:

  1. Tesla closed yesterday at $205.08, so a $240 per share offer seems like a much bigger number. But there's also the issue of total valuation, since Tesla has many more outstanding shares now than it did in 2013.
  2. According to Macrotrends LLC, for most of 2013, Tesla had about 119 million shares outstanding; today, it has about 173 million. So, the 2013 Apple offer would have valued Tesla at about $28.5 billion, while today's market cap is about $35.3 billion.
  3. However, we want the 2013 Tesla market cap, and as it happens, the share price was all over the map that year: from around $37.50 a share in January to a high of $193.37 in September. Let's take the high day, however, when the implied market capitalization of Tesla would have been just over $23 billion.

Add it all up, and assume that Apple's offer came in September, when the stock hit its 2013 high, and it would mean Apple was willing to pay a $5.5 billion premium for Tesla, which is about 24 percent--but only (if Irwin is right) if it could buy Tesla without having to also bring along Musk. 

That's brutal, And stunning. And virtually every other exclamatory adjective I can think of. 

It was also wrong in the short term, as the Musk-led company's stock increased to as high as $279.70 in 2014.

Of course, six years ago is basically ancient history. And it's impossible to know how Tesla would be doing now if it were part of Apple.

  • Would there be a Model 3? Would an Apple-owned Tesla have the same kinds of production and distribution challenges? 
  • Would an Apple-owned Tesla, without all the "funding secured" and "pedo guy" distractions be doing better?
  • Or would it, without Musk, be a company without the same kind of passion and success?

As long as we're asking questions, if Tesla does in fact wind up in a situation where it needs an outside suitor like Apple to survive, what are the odds that Musk stays in control?

Last week, Musk reportedly emailed every single employee at Tesla to warn of "hardcore" cost-cutting. Even with $2.2 billion on hand, he said, that's only enough for Tesla to keep going another 10 months.

Musk's cost-cutting solution: He said he and the chief financial officer will be personally reviewing all expenses within the company--"no matter how small."

Let's just say it, that's insane: The CEO and CFO of a 45,000-employee company say they plan to sign off, page by page, on "all expenses of any kind anywhere in the world, including parts, salary, travel expenses, rent, literally every payment that leaves our bank account."

Of course, if you're working at Tesla--or for that matter if you're buying a Tesla--you're betting that what looks like crazy from the outside is actually the sight of frenetic genius.

You're betting that Musk is truly the indispensable​ man. And the romantic in me (who thinks Teslas are beautiful cars, by the way), hopes you're right. But if this 2013 report and the numbers are right, it looks like Apple wanted to bet that you're wrong.

Published on: May 22, 2019
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