Short-Term TSLA Price Movements - 2016

[SBenson]

Ok, so if I understand what happened this morning on the call:

Nobody has done due diligence, Elon repeatedly said the SCTY acquisition is a "no brainier", and he wasn't able to answer tough questions.

WTF. Is he trying to throw this game?! This seems ill thought out. If the opportunity is so important, why wasn't the sales presentation better?

I'm caught in between anger and upset. Not even sure how I'm supposed to feel anymore.

 

[tinm]

Hooray, I was able to dump Lithium Americas (LACDF) and buy more TSLA this morning.

Goodbye, nasty Hectatone organoclay and Bentonite and Hectagel and Rheology Modifier and your Gelfast amorite treated hectorite clay also known colectively as fracking fluids. For a company calling itself Lithium Americas but making most of your revenue through fracking plays, I am so so happy to be gone from you.

Welcome more Tesla stock. Now, be good, go forth and multiply will you dammit?

 

[Gerardf]

Elon Musk will not be voting on this deal, read the press release please.

Correct. And with Institutionl holders at 66%, they have almost 100% of the vote in this decision.
We hare at the TMC board and other non-inst. investors are the rounding factor (if that is correct English )

 

[Krugerrand]

For something that he's been championing and has such a big part in to potentially fail would be an embarrassment to him...

Yeah, um, no. The guy isn't concerned about being embarrassed. Maybe listen to the last shareholders meeting where he listed mistake after mistake. Please.

 

[SBenson]

Price action seems to indicate a no vote is more likely.

The messed up CC is a blessing in disguise.

 

[Gerardf]

I'm caught in between anger and upset. Not even sure how I'm supposed to feel anymore.

Maybe just watch what happens. Next hour.. and early July. SP going up now where I expected a strong short attack..

IMHO: Would be very foolish to sell now. (but make your own decisions).

P.S. I will be mainly watching what happens with this move at least until Q4-2018.
Just afraid Elon's timeframe is even longer after yesterday

 

[CALGARYARSENAL]

Price action amazing. There is your vote of confidence

 

[182RG]

Need some education RE: "institutional investor vote". Isn't Musk's vote, itself, close to majority? If not, what is it and what institutional alignment is expected to support this? No proxy, for smaller shareholders? That last part might offend

Musk isn't voting. Neither are Cousin 1 and 2 on the SCTY side. Google "Self Dealing".

 

[Causalien]

Ok, so if I understand what happened this morning on the call:

Nobody has done due diligence, Elon repeatedly said the SCTY acquisition is a "no brainier", and he wasn't able to answer tough questions.

WTF. Is he trying to throw this game?! This seems ill thought out. If the opportunity is so important, why wasn't the sales presentation better?

Regulation and laws are just excuses. TSLA has never cared about any of them unless it'll cause them to immediately cease operations or getting someone jailed. If tesla followed the rules, we'd have dealerships selling their cars.

The more important matter is, that they don't understand. Proper due diligence takes at least 3 months leveraging the full might of one if the big banks. If they do it properly, it's too late to save SCTY. If they want to do it in time to save scty, it will not be proper due diligence.

 

[Seesaw]

This could work...

Musk has always wanted to control SC, if he wrestles control this is what could happen:

• Rebrand under Tesla
• Utilise giggafactory battery output with the SC's gigga solar panel factory to create the largest renewable energy and storage company on the planet
  
• Transform the commission and pushy sales tactics and move all sales to Teslas stores where Tesla staff educate the buyer - not do the hard sell
• Cease the addition of new PPAs
• Put together attractive vehicle, powerwall and solar panel packages
• Consolidate all solar panel and battery research under one roof
• Link the power generation and energy storage to efficently move power around the house/car and in and out of the grid
• Cross sell across platforms - car buyers could be linked to energy packages, energy buyers could be cross sold cars
• Step up the level of solar power being generated at Supercharger locations around the world - with the aim of eventually making them net exporters of energy

 

[electracity]

WTF. Is he trying to throw this game?! This seems ill thought out. If the opportunity is so important, why wasn't the sales presentation better?

He may be putting a floor on SCTY price for the next year. SCTY Q2 may suck. Perhaps PPAs are decreasing faster than expected, and SCTY may need time to stabilize into a different business model.

Since due diligence hasn't been performed, Tesla hasn't really made an offer yet. Perhaps the final price will be less.

 

[SBenson]

Musk Fails to Assure Investors Rattled About SolarCity Takeover

By Bloomberg

 

[electracity]

I'm caught in between anger and upset. Not even sure how I'm supposed to feel anymore.

I don't think this hurts Tesla in the long term. The major risk factor is still Tesla executing on the model 3 (quality and volume).

Tesla has the option of "right sizing" Solarcity after purchase.

 

[Chickenlittle]

I don't think this hurts Tesla in the long term. The major risk factor is still Tesla executing on the model 3 (quality and volume).

Tesla has the option of "right sizing" Solarcity after purchase.

That is exactly the issue model 3 and the distraction of time attention and money this draws from it

 

[SBenson]

I don't think this hurts Tesla in the long term. The major risk factor is still Tesla executing on the model 3 (quality and volume).

Tesla has the option of "right sizing" Solarcity after purchase.

I'm particularly worried about how financials would look. The biggest problem with SCTY has always been impenetrable financial statements (deceptive nature of SCTY management doesn't help either).

As we all know, consensus analyst ratings for SCTY have always been bullish, with price targets always 50% higher than prevailing stock price. Here are the projected EPS for SCTY in next few years by the same ultra-bullish analysts.

2019: -9.617
2018: -9.894
2017: -9.798
2016: -8.025

This will be a terrible drag on TSLA EPS. Moreover TSLA financials will become impenetrable. Eventually causing people to just give up.

 

[ggr]

But isn't that counter intuitive? Where I am all the local solar companies are investing heavily in spruiking the Tesla Powerwall.

What will happen when Tesla start competing with them with solar installs? Won't all the local solar companies move away from the Tesla powerwalls to the other battery companies, leaving the expensive SolarCity model as one of the few installers left with the Powerwall.

No other battery company would bite the hand that feeds it by competing with the very companies that are installing them

I agree, the new company will alienate some of the other installers and drive them to other storage companies.

 

[Seesaw]

I agree, the new company will alienate some of the other installers and drive them to other storage companies.

Unless Tesla takes the installation out of the equation and focuses on the product. Each Tesla store could have local contractors they could recommend or you could provide your own licenced installer.

Tesla IMO needs to move away from the installation business, and leave that to small operators that can do that cheaper. Tesla should focus on the big capital side of things like the manufacturing, design, innovation and development.

 

[theschnell]

I've come around. Musk is tired of all the conflict of interest between the two companies, sees SCTY as undervalued, and sees synergy. He has a plan and will make it work to the benefit of TSLA. Within a year it will all be forgotten and everything about the purchase will seem perfectly normal.

Hopefully he can clean up SCTY hard sales tactics while he's at it.

 

[luca]

when will this vote happen?

 

[Gerardf]

2019: -9.617
2018: -9.894
2017: -9.798
2016: -8.025
This will be a terrible drag on TSLA EPS. Moreover TSLA financials will become impenetrable. Eventually causing people to just give up.

Well, don't forget: we propose an exchange ratio of 0.122x to 0.131x shares of Tesla

So, some drag sure. But about a 1/10th of these figures anyway.
(not to mention the SCTY EPS numbers after 2016 will now loose their meaning).