Short-Term TSLA Price Movements - 2016

[MitchJi]

No formal conflicts of interest. But Pfund's fund has stakes in Tesla and SpaceX.

So the best interests of both companies are in their own best interest. How is that a problem?

There is no one on Solarcity's without a conflict of interest. All have investments in Tesla motors as well as investments in Solarcity. Has to be special committee of non board shareholders to consider the deal or not. If a deal is considered, it should be the right of this committee to consider competing offers.

Part of evaluating the offer is the immediate price. Part of the determination is what's in the best long term interest. If you believe Elon this offer is an opportunity to make a big contribution to the transition to sustainable energy, and be part of a trillion dollar business. Do you really want to go with someone other than Tesla?

 

[Foghat]

So the best interests of both companies are in their own best interest. How is that a problem?

Part of evaluating the offer is the immediate price. Part of the determination is what's in the best long term interest. If you believe Elon this offer is an opportunity to make a big contribution to the transition to sustainable energy, and be part of a trillion dollar business. Do you really want to go with someone other than Tesla?

If Solarcity is a reason tesla gets to $1trn valuation, then those investors at today's stock price would get *a lot* more return on their investments they've made in Solarcity if they stay independent or get an actual market value on asset revenue streams from competing offers, then what is being offered from tesla right now.

It's not the idea of acquisition, it's the value of the stock for stock that is atrocious.

Solarcity assets are worth $6.75bln today based on the what Hancock paid *on the market* for a complete revenue stream, why would they take a $27/share stock swap deal?

I would actually like to hear a Solarcity executive explain this and I would then accept the terms this instant upon completion of that explanation...

 

[sdtslafan]

If Solarcity is a reason tesla gets to $1trn valuation, then those investors at today's stock price would get *a lot* more return on their investments they've made in Solarcity if they stay independent or get an actual market value on asset revenue streams from competing offers, then what is being offered from tesla right now.

It's not the idea of acquisition, it's the value of the stock for stock that is atrocious.

Solarcity assets are worth $6.75bln today based on the what Hancock paid *on the market* for a complete revenue stream, why would they take a $27/share stock swap deal?

I would actually like to hear a Solarcity executive explain this and I would then accept the terms this instant upon completion of that explanation...

If the deal falls through, Solarcity will not be able to meet their payments obligations over the next 3 years. Also, no one will loan to them. The stock will GO TO ZERO. Solarcity shareholders should be praying this deal goes through at ANY price. This is why I believe there should be no premium paid for this company.

Because of Elon's large stake in Solar City, he cannot negotiate effectively for Tesla shareholders. Solar City has the weakest cards at the table and everyone knows it.

 

[sdtslafan]

If Solarcity is a reason tesla gets to $1trn valuation, then those investors at today's stock price would get *a lot* more return on their investments they've made in Solarcity if they stay independent or get an actual market value on asset revenue streams from competing offers, then what is being offered from tesla right now.

It's not the idea of acquisition, it's the value of the stock for stock that is atrocious.

Solarcity assets are worth $6.75bln today based on the what Hancock paid *on the market* for a complete revenue stream, why would they take a $27/share stock swap deal?

I would actually like to hear a Solarcity executive explain this and I would then accept the terms this instant upon completion of that explanation...

If you think the offering is too low, please vote NO. You would be doing Tesla shareholders a huge favor.

 

[CALGARYARSENAL]

I think people are finally catching on that the relentless negativity is short driven and that Tesla's future is firmly Intact. They realize every time we hit a technical price some bozo just has to spread garbage. This will only work so long. Great day my friends.

 

[Foghat]

If the deal falls through, Solarcity will not be able to meet their payments obligations over the next 3 years. Also, no one will loan to them. The stock will GO TO ZERO. Solarcity shareholders should be praying this deal goes through at ANY price. This is why I believe there should be no premium paid for this company.

Because of Elon's large stake in Solar City, he cannot negotiate effectively for Tesla shareholders. Solar City has the weakest cards at the table and everyone knows it.

This is laughable at best. it's a broken record in an echo chamber with this propaganda.

Please, anyone that cares, do your own due diligence, take anything you gleen here on a tmc fansite(I love it and support it) with a grain of salt.

Read actual company documents/statements as well as any rating agency assessments and or any term sheets available. Also listen to first hand accounts from executives of both companies and or tax equity investors analysis on why they invest in Solarcity assets.

Get context for why things are as they have happened as well.

Good luck to all on due dilli and don't forget to vote!

 

[dakh]

If the deal falls through, Solarcity will not be able to meet their payments obligations over the next 3 years.

Is this just hearsay or you actually looked into it and can support this assertion with numbers?

 

[Intl Professor]

But who funds Pfund's fund?

The Triple F Foundation.

 

[neroden]

As per BBB+ rating agency rating, Solarcity receives over 99% of all payments due on time on its revenue generating assets, average FICO score is 746. incredible quality, can't find much if anything better on the market today.

You haven't understood a word I've written, have you? That *does not matter*. It's an irrelevance. We all know that perception of credit quality can change overnight, and it's *perception* of credit quality which matters for refinancing, not actual credit quality.

Question number one is, are they reselling those payment streams at a profit or not? *I don't know*, and you don't know either. If you did you would have presented evidence that they were doing so. The accounting is such a mess that it's very hard to *tell*.
Respected auditors, independent investment analysts, etc. all *agree with me* on this.
We *know* they took a loss on one deal, because there's documentation of it in the annual report -- they unwound it at a loss to get out of it! That could be a rare exception, or it could be typical for the deals to be that unprofitable -- but the presentation of the financials obscures things enough that *I can't tell*.

Question number two is, will they continue to resell them at a profit? Since we don't even know how often they're doing so now, this is very hard to tell!

Question number three is, how much have they retained on their books (self-financed) which will require refinancing before it's fully paid off, and the answer appears to be over a billion dollars.

I want them out of this business. If the solar installs are *prefinanced* they have none of this risk.

You agree with me that they finance solar installs initially using revolving loans and solar bonds. Then, MAYBE they manage to sell them at a profit as ABS. Or maybe they don't. If they don't, *even for one month* -- perhaps due to mood swings in the financial markets -- they end up on the hook for a huge refinancing problem. This is a *banking risk*.

Due dilligence is key everyone, make your own judgments and conduct your own analysis...

Indeed. I am hoping that when the Tesla board does their due diligence, they will release some of the information which is necessary to evaluate these banking risks. SolarCity hasn't released it.

 

[MitchJi]

If Solarcity is a reason tesla gets to $1trn valuation, then those investors at today's stock price would get *a lot* more return on their investments they've made in Solarcity if they stay independent or get an actual market value on asset revenue streams from competing offers, then what is being offered from tesla right now.

That depends on why they get to $1 trillion! If they accept a competing offer, even if they make a few more dollars now they might make far less in the long run. Personally I'd take my chances with Elon.

It's not the idea of acquisition, it's the value of the stock for stock that is atrocious.

Solarcity assets are worth $6.75bln today based on the what Hancock paid *on the market* for a complete revenue stream, why would they take a $27/share stock swap deal?.

You could just as easily argue that SCTY share holders are getting TSLA too cheap. Massively undervalued due to the problems with the X ramp, and the failures to properly value the M3 ramp, TE, and the SCTY aqusition. I'm sure you agree on at least the last two?

And I think it's time to stop talking about the SCTY aqusition on this thread. If we haven't beaten it to death we've at least gotten to the point where we're not likely to convince anyone else to a different point of view.

I apologize to everyone for getting sucked into this discussion again. I'm not blaming Foghat who I think has made some excellent contributions that this discussion.

 

[Drax7]

Whenever a deal is not easy to comprehend , walk away.

Maybe two people in the world comprehend what's going on
With this one.

 

[Foghat]

That depends on why they get to $1 trillion! If they accept a competing offer, even if they make a few more dollars now they might make far less in the long run. Personally I'd take my chances with Elon.

You could just as easily argue that SCTY share holders are getting TSLA too cheap. Massively undervalued due to the problems with the X ramp, and the failures to properly value the M3 ramp, TE, and the SCTY aqusition. I'm sure you agree on at least the last two?

Hah, that's right! However, Elon himself has stated that Solarcity may end up bigger then tesla sooner...
Scaling Solarcity is much faster then scaling up cars I gather is one of his factors for reasoning this. They are both trillion dollar global markets, just a matter of which one exploits it best first.

 

[sdtslafan]

Is this just hearsay or you actually looked into it and can support this assertion with numbers?

Musk Touts SolarCity Deal Synergy, But It May Be About Debt

One of many articles on the web. Do we really want Tesla purchase such a financially precarious company?
From my perspective, Tesla is the best shot we have for a sustainable future. Why take such a huge risk? Especially at a time when Brexit sets up to potential for further economic unrest in Europe which could destabilize the world economy...What happens to demand for $100,000 Tesla's when Europe's economy collapses? Does Tesla want to bear the burden for paying over a billion dollars in debt payments in the next 2 years in a recession while simultaneously building out the gigafactory, tooling for Model 3, and growing the service center base. Elon's last 2 raises at 242 and 215 are in the RED. Forget about going back to the markets for money.

In my view, Elons rash decisions are destroying the company while we shareholders watch it happen in slow motion. Maybe I'll sell my TSLA shares so I can watch this Greek tragedy unfold without such a heavy heart.

 

[anticitizen13.7]

Whenever a deal is not easy to comprehend , walk away.

Maybe two people in the world comprehend what's going on.

The problem is that I've concluded I don't have the data necessary for comprehension. I spent an afternoon this weekend reading threads here at TMC, refreshing my knowledge of tax equity partnerships, and trying to understand the latest SolarCity 10-Q.

The major concern I had was the ability of SolarCity to carry its short-term recourse debt (about 1.5 Billion $US in senior convertible notes, with major notes due in 2017, 2018, and 2019), and whether this debt would hobble Tesla's ability to bring Model 3 to production. I was unable to figure out the terms of this debt, like whether it would have to be repaid on a different schedule if SolarCity was sold. This is only one issue, and I may be squawking up the wrong tree to boot.

Elon stated during last week's Conference Call that Tesla would have to conduct Due Diligence on this deal. I hope they release their findings to the shareholders. I feel like I'm staring at an impenetrable wall with currently available info, and it makes my head hurt.

 

[maoing]

Hah, that's right! However, Elon himself has stated that Solarcity may end up bigger then tesla sooner...

How come? Is solar panel practical in Norway where has more than 6 months snowing? Is solar panel practical in China where the rooftop/per family is very limited in apartment buildings. I just want to give two counter examples which turns out to be the #2 and #3 market of Tesla.

 

[maoing]

Musk Touts SolarCity Deal Synergy, But It May Be About Debt

One of many articles on the web. Do we really want Tesla purchase such a financially precarious company?
From my perspective, Tesla is the best shot we have for a sustainable future. Why take such a huge risk? Especially at a time when Brexit sets up to potential for further economic unrest in Europe which could destabilize the world economy...What happens to demand for $100,000 Tesla's when Europe's economy collapses? Does Tesla want to bear the burden for paying over a billion dollars in debt payments in the next 2 years in a recession while simultaneously building out the gigafactory, tooling for Model 3, and growing the service center base. Elon's last 2 raises at 242 and 215 are in the RED. Forget about going back to the markets for money.

In my view, Elons rash decisions are destroying the company while we shareholders watch it happen in slow motion. Maybe I'll sell my TSLA shares so I can watch this Greek tragedy unfold without such a heavy heart.

Well said!

 

[Foghat]

Musk Touts SolarCity Deal Synergy, But It May Be About Debt

One of many articles on the web. Do we really want Tesla purchase such a financially precarious company?
From my perspective, Tesla is the best shot we have for a sustainable future. Why take such a huge risk? Especially at a time when Brexit sets up to potential for further economic unrest in Europe which could destabilize the world economy...What happens to demand for $100,000 Tesla's when Europe's economy collapses? Does Tesla want to bear the burden for paying over a billion dollars in debt payments in the next 2 years in a recession while simultaneously building out the gigafactory, tooling for Model 3, and growing the service center base. Elon's last 2 raises at 242 and 215 are in the RED. Forget about going back to the markets for money.

In my view, Elons rash decisions are destroying the company while we shareholders watch it happen in slow motion. Maybe I'll sell my TSLA shares so I can watch this Greek tragedy unfold without such a heavy heart.

My goodness, I've been following Bloomberg coverage of both Solarcity and tesla for years and they are completely in the tank against both. Cory John is senior editor, thst name ring a bell for anyone out there?

I remember a quarterly earnings came out on Solarcity a year or so back, and Bloomberg did a breaking news bulletin, Solarcity had a loss/share! Solarcity had a loss per share! Big red letters humming on the screen behind the reporter and Cory johnson breaks into soliloquy about the failings of elonnmusk and family. Their coverage is nothing short of short hedge fund propaganda. Again the echo chamber is alive and well with the media on tesla and Solarcity.

Remember too, when warren buffet, a competitor to Solarcity disparages Solarcity by name in an exclusive media interview, you know someone's nipping at their toes. Same goes for fosill fuel centric hedge funds, companies (like the Kochs in Arizona) with regard to Solarcity and tesla in the media.

Again, it is best not to run with Bloomberg news as primary source for due dilligence.

Go to primary sources and reason from there.

 

[drinkerofkoolaid]

Musk Touts SolarCity Deal Synergy, But It May Be About Debt

One of many articles on the web. Do we really want Tesla purchase such a financially precarious company?
From my perspective, Tesla is the best shot we have for a sustainable future. Why take such a huge risk? Especially at a time when Brexit sets up to potential for further economic unrest in Europe which could destabilize the world economy...What happens to demand for $100,000 Tesla's when Europe's economy collapses? Does Tesla want to bear the burden for paying over a billion dollars in debt payments in the next 2 years in a recession while simultaneously building out the gigafactory, tooling for Model 3, and growing the service center base. Elon's last 2 raises at 242 and 215 are in the RED. Forget about going back to the markets for money.

In my view, Elons rash decisions are destroying the company while we shareholders watch it happen in slow motion. Maybe I'll sell my TSLA shares so I can watch this Greek tragedy unfold without such a heavy heart.

You're comment is literally a rehashing of every piece of nonsense that has been mentioned by journalists who have consistently failed to understand Elon's plan, who have somehow concluded Elon is incompetent and making a terrible decision, because they don't understand SolarCity's business model. The "arguments" being made by those who are questioning Elon's sanity sound intelligent until you realize they fail the sanity check and have little substance. Elon knows more about his companies than any analyst or journalist who is writing about them and has proven to be a very competent CEO! To say otherwise is simply wrong.

For your amusement and to make a point, I'll direct you to this semi related video:

 

[maoing]

The problem is that I've concluded I don't have the data necessary for comprehension. I spent an afternoon this weekend reading threads here at TMC, refreshing my knowledge of tax equity partnerships, and trying to understand the latest SolarCity 10-Q.

The major concern I had was the ability of SolarCity to carry its short-term recourse debt (about 1.5 Billion $US in senior convertible notes, with major notes due in 2017, 2018, and 2019), and whether this debt would hobble Tesla's ability to bring Model 3 to production. I was unable to figure out the terms of this debt, like whether it would have to be repaid on a different schedule if SolarCity was sold. This is only one issue, and I may be squawking up the wrong tree to boot.

Elon stated during last week's Conference Call that Tesla would have to conduct Due Diligence on this deal. I hope they release their findings to the shareholders. I feel like I'm staring at an impenetrable wall with currently available info, and it makes my head hurt.

I believe this SCTY deal will make a lot of long time TSLA investors flee away. I think the market currently priced in the case deal not pass, if it's passed as EM advocated, then TSLA easily got another 10% down. I'm planning to reduce my position if there is strength tomorrow and post Q2 report rally.

 

[sdtslafan]

You're comment is literally a rehashing of every piece of nonsense that has been mentioned by journalists who have consistently failed to understand Elon's plan, who have somehow concluded Elon is incompetent and making a terrible decision, because they don't understand SolarCity's business model. The "arguments" being made by those who are questioning Elon's sanity sound intelligent until you realize they fail the sanity check and have little substance. Elon knows more about his companies than any analyst or journalist who is writing about them and has proven to be a very competent CEO! To say otherwise is simply wrong.

For your amusement and to make a point, I'll direct you to this very funny video:

What part is nonsense? Are you disputing that Solar City has a great deal of debt which will become Tesla's problem with the acquision? Are you disputing that Europe and the world economy could unravel in the next year? Please don't rely purely on blind faith in Elon...His ideas are brilliant but his execution has been very poor and that's a fact. He has lost trust and that is not easily regained.