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SCTY Acquisition makes no strategic, financial or operational sense!

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In March 2015, Space Exploration Technologies Corporation, or SpaceX, purchased $90.0 million in aggregate principal amount of 2.00% Solar Bonds due in March 2016. In June 2015, SpaceX purchased an additional $75.0 million in aggregate principal amount of 2.00% Solar Bonds due in June 2016. In March 2016, $90.0 million in aggregate principal amount of the Solar Bonds held by SpaceX matured, and the proceeds were reinvested by SpaceX in $90.0 million in aggregate principal amount of 4.40% Solar Bonds due in March 2017.

Maybe a 3 way merger. We can then get electric spaceships powered by solar that go into space, get close to the sun (during daytime, not nighttime) pick up solar energy from the SolarCity panels on the spaceship, store it in the Tesla batteries and drop ship those batteries in the SC where they can swap out depleted car batteries!!

Vision folks!

Elon is playing 4th dimensional Parcheesi while everyone else is playing 1 dimensional Norwegian Rugby.


Note: This post can not be used outside of this forum with express written consent of the NFL or myself.
 
I get it. It is a weak excuse.
1. If he can recuse himself from a multibillion dollar deal, he can recuse himself from much, much smaller deals that don't put the company at potential risk.
2. I would hope that Tesla has a management team, governance and operating scale that doesn't require the CEO to do the due diligence on every deal they look at.
3. Besides how many deals are we actually talking about here? It was mentioned that they could offer SCTY in the Tesla stores. Great, Home Depot does that (although not sure if it is SCTY or one of their competitors). I really doubt that the CEO of Home Depot had to do the due diligence on that. Maybe offer SCTY techs to do charger installs? That sounds even easier and wouldn't require the CEO of a 20B company to do the due diligence on - don't they have recommended technicians already? Did Musk do the due diligence on each of them.
I think the point still flew over your head. The issue isn't "recusing" Elon, but having a single-supplier relationship set up between Solar-City and Tesla that has the approval of non-Elon shareholders. Doing smaller deals would mean every time Tesla still has to do competitive bidding (regardless of if it involves Elon or not).

Of course setting up such a relationship does not require an acquisition, it can also be done by a strategic partnership, but whatever method they use, it still requires shareholder approval (which Elon is trying to get).
 
Actually Drivin has said he is a Model 3 reservation holder, even though he writes like tftf (including judicious use of sarcasm to ridicule any positive attitudes about Tesla/Elon).

Some people are just surprised that I think Tesla is a really important company because it has a shot at being in the long-term-game-changing category like Cisco, Apple, Google, etc and take that as sarcasm. Whatever.

With all that Tesla needs to do and can do, I don't see how SCTY gets them there faster or with higher likelihood of success. It isn't as if solar panels and installation is a really rare product.
 
Some people are just surprised that I think Tesla is a really important company because it has a shot at being in the long-term-game-changing category like Cisco, Apple, Google, etc and take that as sarcasm. Whatever.

With all that Tesla needs to do and can do, I don't see how SCTY gets them there faster or with higher likelihood of success. It isn't as if solar panels and installation is a really rare product.

Yeah, well cars aren't that rare either.
 
Of course setting up such a relationship does not require an acquisition, it can also be done by a strategic partnership, but whatever method they use, it still requires shareholder approval (which Elon is trying to get).

Strategic partnerships happen all the time without shareholder approval.
Did you have the option to vote on the partnership with Mercedes, Toyota, Panasonic, the Giga plant, the terms of the deal with Nevada, or the other large deals they have done?

Doing smaller deals would mean every time Tesla still has to do competitive bidding (regardless of if it involves Elon or not).

Competitive bidding is a good thing - certainly compared to paying large premiums over market and it happens all the time.
 
Has anybody seen the Silevo cells in person? Are they really that good looking? I take a look at the current 18.4% panels in SolarCity's marketing materials and they don't seem to be in the same league as SunPower's.

http://silevosolar.com/wp-content/uploads/2011/09/Silevo-Triex-R-Q214.pdf

Elon talked about the superiour looks several times today, if this is the module he is referring to then I wonder if he even knows the market. Pretty sure every single one of the large Chinese guys have an all black module Jinko Solar | Your Best Supplier of Modules,Cells & Wafers

I don't think the Silevo deal and the large manufacturing facility in NY was a good business decision for SCTY, it has added a huge amount of risk to the business, I'm sure this is a large part of why Elon wants it under Tesla. If SCTY is on its own and the upstream plans fail it could ruin them. And I think it will be very hard to compete for SCTY, the industry is tough with many bankruptcies, it is pretty much only the Chinese who have survived and they are well below 40c/watt right now, with Jinko for example at 37c/watt in Q1. Compare that to SCTY aiming for 55c/watt when the factory has ramped up who knows when $0.55 per watt from SolarCity’s record-breaking new solar panel | ExtremeTech. Meanwhile the Chinese will continue to cut cost 10% per year.
 
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Elon talked about the superiour looks several times today, if this is the module he is referring to then I wonder if he even knows the market. Pretty sure every single one of the large Chinese guys have an all black module Jinko Solar | Your Best Supplier of Modules,Cells & Wafers

I don't think the Silevo deal and the large manufacturing facility in NY was a good business decision for SCTY, it has added a huge amount of risk to the business, I'm sure this is a large part of why Elon wants it under Tesla. If SCTY is on its own and the upstream plans fail it could ruin them. And I think it will be very hard to compete for SCTY, the industry is tough with many bankruptcies, it is pretty much only the Chinese who have survived and they are well below 40c/watt right now, with Jinko for example at 37c/watt in Q1. Compare that to SCTY aiming for 55c/watt when the factory has ramped up who knows when $0.55 per watt from SolarCity’s record-breaking new solar panel | ExtremeTech. Meanwhile the Chinese will continue to cut cost 10% per year.

Yep. That this is all just a bailout of SCTY is patently obvious and people who claim Elon's just so much smarter than everyone else need to get off the pipe AND turn off the Koolaid spout. Elon is no doubt a smart man, but there are plenty of smart people in the world. He got where he is today by lots and lots of hard work and the stomach to take big risks. It happened to pan out for him so far, but it's not like he's infallible. His conference call was entirely unconvincing and he very clearly could not elaborate much on the "synergies" ... sure, there are intersections between the two companies. But I guarantee you if SCTY weren't a related party, Elon would never do this.

There is absolutely no practical reason why all the things touted by Elon today couldn't be accomplished just as efficiently (if not more so) by simply partnering with SCTY. All that talk about legalities and moralities are complete hogwash. There's absolutely nothing wrong with having favored vendors, and it's not that difficult to prove that transactions are all conducted on an arms length basis.

This is a bailout. Plain and simple. Hopefully once the two are merged, Elon immediately cuts all of the fat and keeps only the parts that make sense. That would be Silevo solar panels (which he can now "purchase" at cost to install on superchargers), current leases, and a portion of the sales force.
 
Selling enough American-made ultra-high quality high efficiency solar panels for $.55/W is a concern? The American market is doubling every 11-16 months with no end in sight.

If Trump gets elected and starts a trade war with China you might be on to something, but if not then they simply can't compete at 55c/watt. You also shouldn't assume that just because they are Chinese the modules are *sugar*, they are well tested and comes with 25-30 year warranties. These modules will probably last much, much longer than the typical 20 year PPA.
 
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If you listen to Musk on the conference call, which I did, he considers the new Silevo panel to be a breakthrough -- he thinks it will be comparable in cost-per-watt to the cheapest Chinese panels, if not lower, and much more space-efficient. He also thinks it's prettier.

Make up your own mind on whether he's right. But my conclusion from listening to the conference call is that *Musk wants Silevo*, and the rest of SolarCity is just coming along for the ride.

If you look at retail cost of installed solar in the us the price of the panel is almost immaterial. The Silevo panel is however materially better then the lower cost panels on efficiency. If it is slightly more efficient you have include the decreased install cost on labor into the equation. Actually most of this deal is probably labor efficiency. Isn't that the standard go to whey we are merging our companies pitch? This is just the we will grow fast more efficiently version not the we are going to fire a bunch of people version.
 
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As Tesla already had power storage systems in their portfolio the acquisition of SolarCity makes some sense to me. Still, renewable energy is not a shortcut to great profits and it is going to be a tough road to make SolarCity profitable.

My latest article touches a bit on the latest news about Tesla. In the article I review how profitable the renewable energy market really is.

"Renewable energy as an investment - is it profitable?"