Short-Term TSLA Price Movements - 2016

[dakh]

Folks, please don't let emotions run rampant. The question you should be asking is, given market valuations of both companies are fair, would the combined company be synergistic enough to be more valuable than just a sum of the two? To me, the answer is obviously yes, and definitely more than the 30% premium Tesla is offering.

 

[geneclean55]

wow...189

 

[stef]

I am definitely not happy about this. If I wanted to buy SCTY, I would have bought SCTY. But I think Musk sees two things. A good price and a way for him to cash Lyndon out and take a more direct control. Mostly, I think he sees a deal. I hope he is right. I don't have the time or energy to evaluate SCTY, but if musk thinks it's a good deal, I guess I trust him.

I think this sums up also my feeling. However, I don't really get the timing. Scty isn't going anywhere, and we'll have q2 numbers soon. Why don't wait for that even simply to get a more favorable swap? Unless deliveries are not as good as they look like...

 

[Snowcat]

Now they can change the name to ''Tesla'' and drop the ''motors''. They recently obtained the rights for tesla.com so this all seems to be part of a bigger plan. They'll probably announce it with the next quarterly results i guess.

 

[Chickenlittle]

This is a HUGE DISTRACTION. Most important priority is model 3 now. Most of market doesn't believe they can meet target and timing/volume. This will not help. This is the pivotal time that the company has worked years to get here. Stick to the mission. It would be reckless to take on a new distraction

 

[speedracer]

When is the vote?
Will SCTY have a tender to invite higher bidders? I assume, yes. That's fiduciary duty.

 

[techmaven]

I am so mad that I am not sure I can post something coherent.

Even if acquiring SCTY made some sort of sense, there are two big issues. one is that SCTY is dying and their business may have to undergo dramatic change. let them make that change and the acquire it.

2nd, the timing is horrible. Just like the secondary offering was made at $215 instead of $250's, this did not make sense now as a TSLA shareholder.

I know that Mr. Musk has more data and vision than the quite possibly the rest of us combined, but his sense of timing and recently, his ability to communicate his vision has not been the best.

Tell me that the Gigafactory is going to make 20 GWh of cells and Panasonic is dumping all $1.6 billion into the pilot phase in clear, unmistaken terms and that acquiring Solarcity is necessary to move 10 GWh of stationary storage next year, and I'll calm down. I don't think TSLA has to acquire SCTY to do that, or TSLA can buy the carcass at throwaway prices later this year or next. It isn't like Solarcity isn't already reselling TE product. No reason to tangle them up right now.

 

[tanner]

This is a HUGE DISTRACTION. Most important priority is model 3 now. Most of market doesn't believe they can meet target and timing/volume. This will not help. This is the pivotal time that the company has worked years to get here. Stick to the mission. It would be reckless to take on a new distraction

Elon will probably buy more shares

 

[MitchJi]

First things first... I actually like TSLA buying SCTY and I'll be voting for this with my shares. I'll probably have to explain this in further detail, but the short version is that Tesla Energy has immense potential and with SCTY they have a great management team, sales and installation to scale Tesla Energy in a very fast manner. The few billion dollars they pay for SCTY now isn't a big deal considering the tens of billions of dollars in revenue they'll have from Tesla Energy in several years.

"Disinterested stockholders" are basically all stockholders minus insiders (ie., directors, officers, etc.). So, Elon Musk and the board won't be voting. And there needs to be a majority of stockholders approve this on both the SCTY side and the TSLA side. I can see the SCTY stockholders approve it fairly easily. But it's probably going to be a bigger challenge for TSLA stockholders to approve it (as evidenced by the general attitude against this on this forum).

I think that the main reason there is a strong attitude against this on the forum is the after market hit to the immediate SP, plus the fear it's going to last.

Maybe Elon knows what he's doing.? He certainly understands Solar Cities value.
Tesla offers to buy solar panel maker SolarCity in deal up to $2.8 billion

Musk, who is also the chairman and principal shareholder of SolarCity, described the deal as "no brainer" in a call with reporters.

 

[DrManhattan]

I feel like this will be a good move when we look back 3-5 years from now, but I can see why people don't like this short term. Especially when you see TSLA sitting below $200. Ouch. I'm going to double down and purchase more in the morning if it stays low.

 

[Drax7]

Nobody else is bidding for that solar garbage with no pricing power
That's the reason the stock is tanking.

 

[Jonathan Hewitt]

I could see this being awesome if TSLA was raking in the cash from Model III sales and wanted to spend it on something rather than pay a dividend. If this was a year and a half from now I would probably be for it.

The blog post did not convince me. Unless I see a better explanation of why this is good I will be using both my SCTY and TSLA shares to vote against this.

 

[EnergyMax]

Elon better give the Part Two of the Model 3 story tomorrow.

 

[tanner]

one is that SCTY is dying and their business may have to undergo dramatic change. let them make that change and the acquire it.

Elon likely wants it done HIS way

 

[tanner]

Elon better give the Part Two of the Model 3 story tomorrow.

He already said end of the year.

 

[tinm]

My initial reaction is negative.

I agree this feels like a distraction to Tesla.
SolarCity seems doomed due to the race-to-the-bottom commodification of solar panels. Didn't they recently buy a Buffalo PV factory? Won't Asia eat their lunch?
Tesla hasn't yet proven it can execute well on Tesla Energy. All the talk in the past few quarterly conf calls hasn't yet made a dent. They're late. This deal feels like they'll continue to be late.
I'm open to learning why this is a good deal for TSLA shareholders. So far, I'm coming up short of reasons.

 

[dakh]

I am definitely not happy about this. If I wanted to buy SCTY, I would have bought SCTY. But I think Musk sees two things. A good price and a way for him to cash Lyndon out and take a more direct control. Mostly, I think he sees a deal. I hope he is right. I don't have the time or energy to evaluate SCTY, but if musk thinks it's a good deal, I guess I trust him.

Wow where do I start... Did you not observe Musk's behavior before? If this deal didn't promise to bring more value to customers it would not be considered. Both men are wealthy enough to retire any moment and had opportunities to do so before. Like Microsoft buying LinkedIn, look at company's mission statements and observe the obvious and natural synergy between the two.

It might not have been a good deal and it'd probably still happen if feasible, but with current valuation a "no-brainer" comment is probably justified even more.

 

[theschnell]

I could see this being awesome if TSLA was raking in the cash from Model III sales and wanted to spend it on something rather than pay a dividend. If this was a year and a half from now I would probably be for it.

The blog post did not convince me. Unless I see a better explanation of why this is good I will be using both my SCTY and TSLA shares to vote against this.

If you already own both, then what does it matter? You already have a stake in both and are now combining them. But I do realize you may have entirely different weightings for each, so that could be one reason...

 

[augkuo]

What the f***.... Why is SP tanking like CRAZY off of this and how low can it go? GEEZ!

Solarcity is not profitable and is losing money ($283 million last quarter, $647 million last year). Most money fund managers want to see accelerating revenue growth which SCTY has but the loss growth is greater which means losses at TSLA will also keep growing. Elon's mission is to create a sustainable means of transport, not to make $$$ so this merger makes sense in that regard - use solar power and Telsa batteries to have a huge network of charging stations.

How low can it go? Analysts thought TSLA could go to ~$450 based upon EPS of $9.50/share (47.3x earnings) in 2019 so now with SCTY dragging it down (estimate of -$8.60/share in 2019 so $1.13/share after merger) you're looking at $395. A 13% hit which is what
TSLA is down now (219.61 to 190.0).

 

[woof]

Looks like a double short squeeze play. First tender an offer, SCTY shares shoot up, short squeeze to follow. TSLA shares tank. Deal isn't consummated, as is used as a stalking horse to sell SCTY to someone else with better terms. TSLA shares relief rally and another short squeeze ensues.