Short-Term TSLA Price Movements - 2016

[DriverOne]

Is this Tesla Energy buying an instant sales force, installation crew, and customer list? If so, pretty cool.

 

[dmckinstry]

Even Tftf a notorious short is rooting this move on. Enough said

I've assumed he's being sarcastic.

 

[ggr]

So if Tesla acquires Solarcity, they acquire their stores. If they are in a state that currently blocks Tesla from having stores, can Tesla promote cars in those acquired Solarcity stores? If this is true then EM is playing 3D chess while everyone else is playing checkers.

Think about it the other way around, too... suddenly Solar City has stores in Europe, Asia, Australia...

 

[rallykeeper]

I am doing what everyone do and searching for scty net loss per quarter. Since this is thrown upon me without any preparation it is the best I can do. Prove that it's not and I will change my opinion.

SolarCity had a GAAP loss of $768 million for all of 2015.

It only raised ~$187 million for all of 2015 in new equity and it burned through another $120 million for a total of ~$300 million -- all its other cash needs were through direct debt or solar financing.

I think the ~$300-$500 million annually is the better metric for the annual cash tab for Tesla unless it wants to expand or change SCTY's financing model.

 

[dakh]

I'd want to know exactly how Elon and the Tesla team intend to accomplish a turnaround at SolarCity. The blog post had no details on how Tesla intends to accomplish this.

If I'm having serious questions about it, you can bet that the big institutional shareholders are going to demand answers too: Tesla Motors, Inc. (TSLA) Ownership Summary

Institutions hold a whopping 93.3 Million (approximately) shares of TSLA, representing 63.33% of the company. Fidelity alone holds over 16M shares.

Same ones own half of SCTY. Fidelity, Bank of Montreal, Vanguard, Morgan Stanley, etc. Any bets on if they were consulted with before this proposal?

 

[Chickenlittle]

Not sure this has been posted, yet: Tesla's Acquisition Of Solar City Would Be 'Groundbreaking' - (SCTY), Tesla Motors, Inc. (NASDAQ:TSLA)

Yeah has acid trip ever been right

 

[FredTMC]

I wonder if the stockholders who bought in at the 215, and 242 secondaries will vote for this takeover?

Ummm. No. They aren't happy.

This is a big slap in the face. Elon will be getting some calls from some very unhappy institutional investors.

I can't fathom why this move couldn't wait until TSLA SP was in a far better position.

 

[anticitizen13.7]

Same ones own half of SCTY. Fidelity, Bank of Montreal, Vanguard, Morgan Stanley, etc. Any bets on if they were consulted with before this proposal?

Given that both TSLA and SCTY are publicly traded companies, wouldn't "material" information like this have to be made available to everyone at the same time? Cluing in some parties but not others seems to create a huge risk of insider trading.

 

[geneclean55]

Personally, I've been depressed by SCTY's performance, and have been reducing my exposure to them, even though I very much believe in their model. On the whole, I think that in the fullness of time this will work out to be a good move, but in the short term (which seems to be all that the market cares about) a bit of a disaster for the stock price.

The big drop will trigger more selling in the morning, as people's stop loss orders execute. Probably enough to cause the "short selling circuit breaker" to open. I will probably cash some of my SCTY soon, and wait till I see what I think is a recovery for TSLA.

Couldn't short covering to lock in profits, bring the price up some?

 

[Foghat]

SolarCity had a GAAP loss of $768 million for all of 2015.

It only raised ~$187 million for all of 2015 in new equity and it burned through another $120 million for a total of ~$300 million -- all its other cash needs were through direct debt or solar financing.

I think the ~$300-$500 million annually is the better metric for the annual cash tab for Tesla unless it wants to expand or change SCTY's financing model.

Solarcity pays for the whole system up front threw debt for a 20 year cash flow on average fico scores over 740.

They actually start making money year one on all lease/ppa they install. Over the past 9 years in business they've had less the .5% not on time payments on lease ppa customers (99.5% have paid lease on time). You can't find a better payment record then that in a major industry globally.

Solarcity is vastly undervalued. That is why Elon is buying.

 

[MitchJi]

Even Tftf a notorious short is rooting this move on. Enough said

Someone with an outstanding reputation for his wise and intelligent posts. So listen to tftf instead of Elon who said this is a no brainer? Thanks for letting me know. I have him blocked so I would have missed that.

I decided not to click "show ignored content" so guess I'll miss it anyway.

No. He's not okay with this...

I'm not okay with this either.

What do you base that on? If all of the institutional investors vote against this it won't go anywhere will it?

Elon Musk's Tesla Motors Inc. just made an offer to buy Elon Musk's SolarCity Corp. for as much as $2.86 billion. The mind boggles.

Musk is the largest SolarCity shareholder, already owning 23 percent of the company, so he would personally profit by as much as $140 million from his shares. On the other hand, he's also the largest shareholder of Tesla, a much bigger company, which fell about 11 percent in late trading after the deal was announced. That cost him about $715 million, so on net he's down about $575 million. Not a great start.

So why is he doing it? There's basically two ways to look at it: Either Musk, 44, is bailing out a beleaguered company that's run by his cousin, Lyndon Rive, or he's consolidating a clean-energy empire at rock-bottom prices. Or both.
<Snip>
Scenario 2: An empire rising
An alternative reading of the offer is that Musk knows a good deal when he sees one. With shares hovering near their lowest prices since 2013, Tesla's proposed 21 percent to 30 percent premium still makes for a historically low valuation of under $2.9 billion for one of the world's biggest rooftop solar installers.

More from Bloomberg.com: Brexit Vote in Balance in Polls as Soros Warns of Pound Plunge

It allows Musk to integrate the three-legged stool of clean energy in a way the world has never seen: electric cars, solar power, and grid battery storage all in one place. If so inclined, you could provide for all of your energy needs without ever leaving the Tesla family. Forget the economies of scale (which are significant), that's just powerful branding. And adding batteries to solar is about to become increasingly common, according to a recent analysis by Bloomberg New Energy Finance.

Tesla showrooms are swanky modern places of clean-tech worship, and now all that well-heeled foot traffic may be able to peruse solar panels and home batteries while sipping their Tesla cappuccinos. Musk is promising to make solar panels cooler, "including by making solar panels add to the look of your home." The deal, if approved by shareholders, could also help Tesla become a major distributor of utility-scale battery storage and solar power.
<Snip>

 

[Causalien]

SolarCity had a GAAP loss of $768 million for all of 2015.

It only raised ~$187 million for all of 2015 in new equity and it burned through another $120 million for a total of ~$300 million -- all its other cash needs were through direct debt or solar financing.

I think the ~$300-$500 million annually is the better metric for the annual cash tab for Tesla unless it wants to expand or change SCTY's financing model.

More numbers. From Yes camp please. Synergy savings? What new customers who didn't already know these two corps are related.

My gut is screaming "Wrong timing" at this.

And from a gameplan perspective. Assuming that SCTY purchase pan out. TSLA does not need SCTY to achieve greatness in the future. So the decision is: TSLA alone ==> greatness. TSLA with SCTY = either greatness or chance of failure.

I will completely support this in 2 years, but the timing of this is not right.

Disclosure: I own TSLA

 

[drinkerofkoolaid]

I'll repeat this again, since apparently no-one else has said this. If Tesla buys all of SolarCity's shares doesn't that force all SolarCity shorts to cover?

What better timing. Also, remember, Fidelity, Bank of America, Lyndon Rive, and Elon Musk own most of the shares of SolarCity. As long as Lyndon and Elon don't plan to sell their Tesla shares any time soon, this is a very good thing for
Tesla.

 

[dc_h]

I hope Elon doesn't start sleeping on roofs to solve scty quality control problems.

 

[dc_h]

I'll repeat this again, since apparently no-one else has said this. If Tesla buys all of SolarCity's shares doesn't that force all SolarCity shorts to cover?

So this is an interesting scenario. Jim Chanos, are you listening! You have to cover your scty shorts now and on July 3rd you get spanked again? Maybe, just maybe there is a double short slam in play.

 

[dakh]

I'll repeat this again, since apparently no-one else has said this. If Tesla buys all of SolarCity's shares doesn't that force all SolarCity shorts to cover?

I thought so too and also options unwind, but apparently that's not the case so maybe they just become short TSLA instead?

 

[Causalien]

Solarcity pays for the whole system up front threw debt for a 20 year cash flow on average fico scores over 740.

They actually start making money year one on all lease/ppa they install. Over the past 9 years in business they've had less the .5% not on time payments on lease ppa customers (99.5% have paid lease on time). You can't find a better payment record then that in a major industry globally.

Solarcity is vastly undervalued. That is why Elon is buying.

Question if you know their financials. Can SCTY last for more than 4 years if we stop expansion right now and will that be net cash burn or net cash positive.

 

[drinkerofkoolaid]

So this is an interesting scenario. Jim Chanos, are you listening! You have to cover your scty shorts now and on July 3rd you get spanked again? Maybe, just maybe there is a double short slam in play.

What's on July 3rd?

 

[dakh]

More numbers. From Yes camp please. Synergy savings? What new customers who didn't already know these two corps are related.

My gut is screaming "Wrong timing" at this.

And from a gameplan perspective. Assuming that SCTY purchase pan out. TSLA does not need SCTY to achieve greatness in the future. So the decision is: TSLA alone ==> greatness. TSLA with SCTY = either greatness or chance of failure.

I will completely support this in 2 years, but the timing of this is not right.

Disclosure: I own TSLA

Personally I think the more this would get delayed the more the loss of opportunity. Rethinking how electrical grids operate and how we get power is happening right now, and there's going to be game-changing set of hardware/software available within a year.

 

[geneclean55]

What's on July 3rd?

Tesla delivery numbers