Uber Acquisition Rumors: What's the Impact on Tesla Stock?

Jason Calacanis, an early Uber investor, predicted that major mergers and acquisitions would continue in the autonomous driving sector. He warned that he would not be surprised if large corporations like Tesla, Amazon, or Google acquired Uber for $300 billion. This statement is interpreted as anticipating a shift in the ride-sharing market landscape with the advancement of autonomous driving technology.

Given Tesla's market capitalization of $1.4 trillion, a cash acquisition is impossible, and it would likely require issuing new shares. If $300 billion worth of new shares were issued, it could dilute existing shareholders' stakes by more than a quarter, potentially causing significant controversy.

Elon Musk previously acquired Twitter for $44 billion, acknowledging the value of an established brand and user network beyond mere app development capabilities. Uber also boasts 208 million monthly active users (MAU), offering a strategic advantage for Tesla to immediately secure vast user data and a platform if it were to acquire Uber. This could serve as a crucial foundation for the expansion of its autonomous driving service, 'Cybercab'.

However, Uber's price-to-earnings ratio (PER) is between 16.3x and 16.8x, a 59% drop compared to its average PER of 39.6x over the past three years. This reflects the market's concerns about future uncertainties due to the advent of autonomous driving and increased competition in the ride-sharing market.

Some argue that buying Uber now is like paying 17 years' worth of profits upfront to acquire the entire company, and there is insufficient certainty that Uber will exist in its current form 17 years from now. This is because the commercialization of autonomous driving technology would eliminate the need for drivers, inevitably leading to fundamental changes in Uber's core business model. Consequently, uncertainty is growing over whether Uber can maintain its current dominance in the future ride-sharing market.

Goldman Sachs analyst Mark Delaney analyzed that if Tesla's Cybercab is produced at a cost of $20,000-$30,000 per unit, it would secure a cost advantage of 5-30 cents per mile compared to competing autonomous vehicles ($50,000-$100,000 per unit). However, this cost advantage is predicated on successful mass production. Goldman Sachs maintained its 'Neutral' rating and a $360 price target for Tesla.

This suggests that Goldman Sachs views the current Tesla stock price as appropriately valued and reflects a conservative outlook on short-term stock appreciation potential.

In New Jersey, it supports legislation requiring humans to be present in 85% of all robotaxi rides, and in Washington D.C., it has endorsed a bill to outright ban autonomous vehicles from roads. This is a strategic move, fearing that the proliferation of robotaxis would negatively impact Uber's profits. Uber sold its autonomous driving technology development unit to Aurora in 2020.

If Tesla acquires Uber, it would not only take over the Uber app but also the years of organized political activity by its drivers. If a company seeking to replace these jobs with robotaxis becomes the owner of the driver platform, significant social and political problems could arise. There are already demands for taxi driver funds in some areas, such as Atlanta, and such cost burdens would need to be considered in an acquisition.

J.P. Morgan expects Cybercab volumes to be negligible by the end of 2026 but to increase to around 9,000 units by the end of 2027. Uber's reason for collaborating with driver unions to curb robotaxi expansion is precisely to slow down this rapid spread of Cybercabs. The future direction of Uber's stock price will be determined by the pace of autonomous driving technology adoption, and the conflict between Tesla and Uber is expected to intensify.