Tesla short selling and the company’s failure to detail funding sources for a $420 a share privatization plan proposed by its embattled CEO Elon Musk have led to large stock-price swings after the little-reported but potentially important hiring of Goldman Sachs (NYSE: GS) and buyout firm Silver Lake as financial advisors. 

Shares of Tesla Inc. (NASDAQ:TSLA) closed up 4.3 percent on Tuesday, Aug. 21, after investment firm Morgan Stanley (NYSE:MS) moved its ranking of the auto company’s stock to “not rated” from “equal rated.” The change led to speculation among investors that Morgan Stanley may participate in raising funds for Tesla as a financial advisor, since white-shoe investment firm Goldman Sachs last week stopped coverage of the Silicon-based company and cited its new role in assisting the electric car maker.

The hiring of Goldman Sachs coincided with its auto analyst David Tamberrino, who previously had given at $210 price target on Tesla, announcing on Aug. 15 that the stock would be moved to “not rated.” As a financial advisor, Goldman Sachs is engaged in a matter that is “fundamental” to a reasonable analysis of its rating and price target for the stock, according to the company’s Americas Investment Review Committee.
Hilary Kramer, a Wall Street investment professional who heads the Turbo Traderand Inner Circle advisory services, expressed support for Tesla’s decision to hire Goldman Sachs.

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Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce,Seeking Alpha, GuruFocus and other publications and websites. Paul is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is the editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz.