Tesla's Stock Jumps As SolarCity Merger Approval Will Free Stock To Rally

Shares of Tesla Motors Inc. rallied 1.3% in premarket trade Friday, after shareholders approved the electric maker's proposed acquisition of solar power company SolarCity Corp. late Thursday. Analyst Ben Kallo at Robert W. Baird affirmed his bullish outperform rating on Tesla, said he expects the stock should move higher after noise around the merger subsides. "In our opinion, investor focus will return to the ramp of the Gigafactory, Model S and X production, and the ramp of Model 3 production, and we believe shares will move higher with execution," Kallo wrote in a note to clients. He said Tesla Chief Executive Elon Musk believes Tesla would be in a better competitive position if a Republican government repeals the electric-vehicle subsidies. Kallo's stock price target of $338 is 79% above Thursday's closing price of $188.66. SolarCity's stock surged 2.6% ahead of the open. Tesla's stock has lost 3.2% since the election through Thursday, and has tumbled 21% year to date, while the S&P 500 has gained 7% this year.