Short-Term TSLA Price Movements - 2016

[Mario Kadastik]

What I found interesting in the SCTY pre-announce:

We anticipate two new product releases in the second half of the year that we expect to meaningfully impact MW installed in 2017. These include (1) a new, integrated solar and storage offering and (2) a new solar product focused on the 5 million new roofs installed each year in the U.S.

#2 of that seems to be solar shingles indeed... So this is an interesting situation where SCTY does look like it has a bright future, TSLA has gone up and the offer coefficient has been now fixed.

Btw is it fixed now? If TSLA were to run to $300 now would the ratio adjust to keep at 2.6B$ or is it now in stone and would go up with TSLA share price?

 

[Lessmog]

Archambault: "analyses from reliable sources"
Elon: "heh heh heh"

 

[Mario Kadastik]

Record date will be announced after SEC approval, will give plenty of time. So time to recall and squeeze

 

[techmaven]

Well, I am glad I sold out my SCTY at $27 and some change.

 

[Mario Kadastik]

Well, I am glad I sold out my SCTY at $27 and some change.

Well one thing unknown to me yet is what was now fixed. 0.110 ratio or $2.6B? If TSLA were to go up 20% now, would that mean the ratio holds or goes down?

 

[NOLA_Mike]

Well one thing unknown to me yet is what was now fixed. 0.110 ratio or $2.6B? If TSLA were to go up 20% now, would that mean the ratio holds or goes down?

I believe that effective with this morning's announcement that the 0.110 is now fixed (unless another offer comes in and the whole thing blows up).

Here are some key terms of today's announcement: this is an all-stock transaction with an equity value of $2.6 billion based on the 5-day volume-weighted average price of Tesla shares as of July 29, 2016. Under the agreement, SolarCity stockholders will receive 0.110 Tesla common shares per SolarCity share, valuing SolarCity common stock at $25.37 per share based on the 5-day volume weighted average price of Tesla shares as of July 29, 2016.

Note the $2.6B is based on current prices (and subject to change as stock prices change between now and the close) but the ratio that SCTY stockholders will receive is fixed at 0.110 and no longer expressed as a range.

That's my interpretation but I admit I could be wrong...

Mike

 

[stef]

Well one thing unknown to me yet is what was now fixed. 0.110 ratio or $2.6B? If TSLA were to go up 20% now, would that mean the ratio holds or goes down?

From the wording, the fix is on the ratio of 0.110. The value is quoted as result of TSLA average of the last 5 days.
My understanding is that from now on they will move together at that ratio, and the value of the deal will move accordingly.

 

[NOLA_Mike]

From the wording, the fix is on the ratio of 0.110. The value is quoted as result of TSLA average of the last 5 days.
My understanding is that from now on they will move together at that ratio, and the value of the deal will move accordingly.

And if they don't, then that indicates the market thinks the deal is falling apart.

 

[Yggdrasill]

This is from the Form 8-K submitted to the SEC:

"Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of SolarCity common stock, par value $0.0001 per share (the “SolarCity common stock”) issued and outstanding immediately prior to the Effective Time (other than shares of SolarCity common stock owned by SolarCity as treasury stock or owned by Tesla or Merger Sub, which will be cancelled) will be converted into the right to receive 0.110 (the “Exchange Ratio”) shares of Tesla common stock, par value $0.001 per share (the “Tesla common stock”)."

 

[Lessmog]

Elon: "silly buggers, honestly!"

 

[vgrinshpun]

Baird's Ben Kallo is cautious on TSLA Q2 (via Streetinsider.com):

Baird analyst Ben Kallo reiterated an Outperform rating and $338 price target on Tesla Motors (NASDAQ: TSLA) although they are cautious into the quarter.

Kallo commented, "We are cautious heading into the quarter as significant positive information has been released over the past few weeks, and we believe margins could disappoint given the higher mix of Model X vehicles, and due to this being the first quarter of the Model S refresh (although the refresh should allow for higher margins over time). We are not expecting any significant news announcements, and would be buyers on weakness as TSLA continues to show strong technological innovation."

The firm's estimates are below consensus after adjusting for Q2 deliveries of 14,370 vehicles. They now forecast revenue of $1,531.8M, non-GAAP net income of ($82.8M), and non-GAAP EPS of ($0.60), vs. consensus of $1,637.9M/ ($72.2M)/($0.54), respectively. For Q3 and Q4, they now expect deliveries of 21k and 29k vehicles, respectively.

For an analyst ratings summary and ratings history on Tesla Motors click here. For more ratings news on Tesla Motors click here.

Shares of Tesla Motors closed at $234.79 yesterday.

 

[vgrinshpun]

Elon on the conference call (response to first question): if a better offer comes through I will vote for that offer. So much for SolarCity being on the crucial path of his Tesla 'secret master plan'.

My interpretation is that this was added in order to pacify those at SCTY that believe the deal undervalues SCTY. Elon committed to not vote for the higher offer, but vote with the Solar City independent part of the Board on the higher offer. I think that Elon is convinced that Tesla offer is the best Solar City can get, especially when synergies are taken into consideration. I do not see any contradiction with the Master Plan.

 

[gigglehertz]

563 shares of SCTY x $61.72 (52 week high) = $34,748. Just about M3 minus taxes.
563 x 0.110 = 61.93 rounded cruelly down to 61 shares of TSLA
61 x $271.57 (52 week high) = $16,565.77

You TSLA folks are getting a steal. {MODERATOR DELETED UNACCEPTABLE LANGUAGE}

 

[NOLA_Mike]

You TSLA folks are getting a steal.{MODERATOR DELETED}

The only thing to hang your hat on is the belief that $TSLA you receive will appreciate more than $SCTY stock would have going forward?

 

[gigglehertz]

Long term, TSLA could be a monster. But I had it all planned out, anything above 52wk high nets me a M3 possibly in time for launch. Now I would need TSLA to hit $573. That's going to take a while.

 

[Lessmog]

TSLA is rapidly approaching conversion parity with SCTY. If that's any consolation, Giggles?

 

[CALGARYARSENAL]

563 shares of SCTY x $61.72 (52 week high) = $34,748. Just about M3 minus taxes.
563 x 0.110 = 61.93 rounded cruelly down to 61 shares of TSLA
61 x $271.57 (52 week high) = $16,565.77

You TSLA folks are getting a steal. {MODERATOR DELETED UNACCEPTABLE LANGUAGE}

I hope you made the SCTY trade on your own accord and didn't rely too heavily on the "experts" around here. Cheers.

 

[NOLA_Mike]

I own SCTY too. My feeling is that it was going to take a long time for it to get back to those 52 wk highs. So, I'm okay with trading them for $TSLA shares which I think have more potential.

Mike

 

[Krugerrand]

Elon on the conference call (response to first question): if a better offer comes through I will vote for that offer. So much for SolarCity being on the crucial path of his Tesla 'secret master plan'.

You've made at least one wrong assumption here, and you won't be alone. Lots of bears, short-sighted people, and those who like to think inside the box/only paint inside the lines will make the same assumption.

'Better' doesn't mean simply 'more money'. A 'better deal' would be one that realizes better synergies, better future vision for a sustainable planet, and 'perhaps' a higher value placed on SCTY. Not. Going. To. Happen. Consider the deal done.

 

[Mario Kadastik]

Well I sold my SCTY calls around $54 as that time it looked to have run a bit hot Didn't do so well in TSLA shares at around 260+$ though But in any case hoping and wishing is not for stock market. The price as it was right now and looking forward is what one should look at, not 52w highs or lows.