Tesla shares pull back as rally pauses

Investing.com -- Tesla Inc shares dropped about 2.0% in morning trading Wednesday, retreating to $399.47 after a two-session rally that pushed the stock from approximately $372 to a session high of $410.85.

The advance was driven largely by speculation about a possible merger with SpaceX and an analyst upgrade from Barclays. The stock now sits at the average Wall Street analyst price target, leaving little room for further gains based on current consensus estimates.

Profit-taking emerged as the stock reached the target level. No formal merger agreement between Tesla and SpaceX has been announced. Elon Musk previously stated that a combination between the two companies should not be assumed to be certain.

Tesla's third-quarter results showed a sharp decline in operating income and automotive revenue. The company's operating margin contracted due to rising research and development expenses. A Form 4 insider filing was published for Tesla on Wednesday.

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