Short-Term TSLA Price Movements - 2016

[Jonathan Hewitt]

I've heard this before. Several times actually.

You really believe that Elon hasn't thought this out? Really?! Come on, you've got to be kidding me.

I can only guess, though I think it's a pretty good guess, that the primary reason so many are upset is because it affects their stash of cash in the moment and/or immediate future. Money has a powerful grip on many people, such that they will often act out of character when that money is threatened in the moment. This is deja vu. It's exactly like the minute after Tesla changed the game plan for FCF at the last ER and announced pulling Model 3 production ahead a full year. You'd think by now that the long timers here would be prepared for a change of direction from Tesla, but it seems some never learn. Long and strong is so not stressful...just sayin'.

I loaded up after the whole Model III acceleration announcement. While the short term losses sucked I bought into the vision knowing that long term things would most likely work out. While this SCTY merger may turn out super awesome and be a great boon for both companies (and I hope it does), the risk that it doesn't is a strong possibility. If I wasn't sitting on large losses I would be substantially trimming my position and exposure.

If he shared his vision more clearer so an idiot like me can see that it is a "no brainer" rather than a "no brain" move then I reverse all my statements.

 

[Chickenlittle]

Funny scty only up to 23 dollars. Market not convinced this will go through or believe Tsla will be dropping further

 

[30seconds]

In listening to the webcast this morning, sounds like a Powerwall/inverter/solar panel integration is a major reason for the deal. They are realizing that Powerwall V2.0 needs to have an integrated inverter, and Elon now says that some sort of integrated solar panel/inverter/Powerwall system is possible and needed.

Not sure where this leaves SolarEdge? Is Solarcity going to build in SolarEdge optimizer into their panels? Or are they going to build their own? And who builds these Powerwall/Solarcity inverters?

This becomes more interesting - the ability to design and install a more efficient solution than anyone else. Plus I'm assuming that SC will be the default charger installer (with or without panels) for most people in the US when it comes time for Model 3 deliveries.

 

[pGo]

Funny scty only up to 23 dollars. Market not convinced this will go through or believe Tsla will be dropping further

It is because scty is now in parallel with tsla (.11 to .13) is the range. If Tesla goes down to $180, there is no premium paid for scty. I believe this will likely happen in the days to come. No shareholders from scty or tesla will be happy, though big owners of scty will be better off getting out and get into tsla in one shot.

 

[doctoxics]

Not sure where this leaves SolarEdge? Is Solarcity going to build in SolarEdge optimizer into their panels? Or are they going to build their own? And who builds these Powerwall/Solarcity inverters?

I've had an order in for 3 powerwalls for more than a year and still no word from Tesla on the purchase. Now waiting for the second version of the powerwall and will probably be waiting for a Tesla inverter as well. May as well add Tesla solar panels to the list. Elon - how long must I wait for the Tesla package?

 

[pGo]

Did anyone catch the 3x improvement or something Elon mentioned in the last few minutes - while working in sync with Panasonic. If you have more details, please share.

 

[Jayjs20]

Good morning. Its literally up 16 dollars form yesterday's ah low. Is my buying opportunity slipping away?

 

[Drax7]

i would never buy Solarcity stock, no pricing power and nothing really proprietary plus their
balance sheet and income statement are over my head.

If their new combined products are especially compelling, and present a value proposition
to the customer, and if it helps tesla expand TE and gigafactory dramatically, then that adds value.
If their panels are hyper efficient and esthetically pleasing and increase the value of a house, that
would be a product advantage .

From my vantage point i cannot do a proper cost/benefit analysis. I don't have
the information and knowledge. Though I know it adds liquidity risk to Tesla until they are
cash flow positive, and risk means price concession.

Applying game theory principles, decision making under uncertainty , leads me to liquidated half my position.

 

[Vitold]

• Tesla Motors can provide storefront for Solar Sales (No more Home Depot "can I talk to you for a moment" sales pitch)
• SolarCity/Tesla Motors/Tesla Energy can leverage knowhow of inverter , battery chemistry, industrial design to produce a highly optimized turn-key solution.
  
• Tesla Motors and SolarCity will share residential and grid contacts

None of the above requires merger however. Therefore I think another important point is that merger with Tesla will enable SolarCity to refinance their loans at better rate.

 

[drinkerofkoolaid]

If Tesla buys all shares of Solar City won't everyone short SolarCity have to cover?

 

[drinkerofkoolaid]

Elon seems tired, he is repeating himself a lot.

It was 4:30am in California. I'd be surprised if he wasn't awake all night preparing for the call.

 

[schonelucht]

Tesla Motors can provide storefront for Solar Sales (No more Home Depot "can I talk to you for a moment" sales pitch)

So now it will become a Tesla store "can I talk to you for a moment" sales pitch. The Tesla purchase experience is consistently praised by customers. Unless Tesla changes the complete sales staff of what is formerly SolarCity that experience will not be there anymore. And hearing Elon talking this morning, the plan is literally to sell every single one of the Model 3 reservation owners a solar system for an additional 35k. No matter the proposition, that's not going to happen without some high pressure sales tactics. In a Tesla store. If that plan goes forward I think ultimately this is going to reflect badly on the Tesla brand.

 

[Vitold]

So now it will become a Tesla store "can I talk to you for a moment" sales pitch. The Tesla purchase experience is consistently praised by customers. Unless Tesla changes the complete sales staff of what is formerly SolarCity that experience will not be there anymore. And hearing Elon talking this morning, the plan is literally to sell every single one of the Model 3 reservation owners a solar system for an additional 35k. No matter the proposition, that's not going to happen without some high pressure sales tactics. In a Tesla store. If that plan goes forward I think ultimately this is going to reflect badly on the Tesla brand.

I would imagine it would become one of the options when buying a car:

Do you want a bike rack? - click here, do you want to save earth / money / make sure your car does not emit C02?- click here.

 

[drinkerofkoolaid]

Almost 100% sure it will get approved. It's been clear to anyone paying attention this was going to happen. For SolarCity's true value to be realized, it must become a part of Tesla. This will increase the quality of SolarCity's credit, the value of SolarCity's assets, and the rate at which SolarCity can accelerate its sales. Also, this will significantly reduce SolarCity's customer acquisition costs.

 

[trils0n]

Ok. After thinking about this deal overnight I think I'm warming up to it.

The main issue for me is Solar City's cash flow. If Solar City is actually free cash flow positive in the next 3-6 months as Mr. Musk said in the conf call, it will be ok. The danger is that Solar City is a drag on Tesla's cash. If Solar City is actually making money everything else is kind of moot. It won't put Tesla's Model 3 ramp at risk. Don't know if this will actually happen because I can't make sense of Solar City's financials. Sounds like Solar City's Silevo tech is pretty strong as well.

How does this help Tesla?
PowerWall kinda sucks without Solar. It is a weak product unless you have Solar, then it is pretty sweet. To have to rely on an outside partnership to make your product effective is an undesirable position to be in. This deal will help Tesla with residential energy storage part of it's business.

Help in the growing dealership fight would also be welcome, and this deal might provide that.

Solar City is undoubtedly stronger under Tesla.

One of my big problems with Solar City is their high sales/customer acquisition costs. Walk in foot traffic at Tesla stores will help lower their sales costs. Lower sales costs and Solar City's financial situation improves tremendously.

Solar is a stronger product with PowerWall, and less vulnerable to net metering and utility shenanigans.

Negatives about Solar City:
-Solar City's advertising is terrible (the sun god Ra ads were a good example of WTF!? Their twitter account is bizarre too) -- their advertising reminds of me of GM trying to sell the Volt. They have no idea how to sell their (good) product or how to speak to their customers. Tesla excels in this area. I hope Solar City doesn't dilute Tesla's excellence in this area.

-Solar City's sales tactics are basically the opposite of Tesla. They are pushy, and feel deceptive. Reminds me of car dealerships. This will have to change, or it will damage one of the shining points of Tesla.

 

[X Yes?]

Almost 100% sure it will get approved. It's been clear to anyone paying attention this was going to happen. For SolarCity's true value to be realized, it must become a part of Tesla. This will increase the quality of SolarCity's credit, the value of SolarCity's assets, and the rate at which SolarCity can accelerate its sales. Also, this will significantly reduce SolarCity's customer acquisition costs.

Either you really are drinking the Kool-aid or you own shares in both TSLA and SCTY. Even if you believe the synergies are real, SCTY could have acquired for pennies on the dollar in a few months.

 

[Gerardf]

So now it will become a Tesla store "can I talk to you for a moment" sales pitch. The Tesla purchase experience is consistently praised by customers. Unless Tesla changes the complete sales staff of what is formerly SolarCity that experience will not be there anymore. And hearing Elon talking this morning, the plan is literally to sell every single one of the Model 3 reservation owners a solar system for an additional 35k. No matter the proposition, that's not going to happen without some high pressure sales tactics. In a Tesla store. If that plan goes forward I think ultimately this is going to reflect badly on the Tesla brand.

Well. My guess is it will be much more pull than push, and more subtle. They will not bring up Solar panels or storage, but a home-charging solution. Should be part of all talks in the Tesla shops with car prospects anyway. The other two components will be optional in the discussion.

EVERY Tesla prospect will need some home charging (or work charging) solution and will be very happy to discuss that. I just dropped some text about that here :SCTY Acquisition makes no strategic, financial or operational sense! (in answering why IMHO it all DOES make sense )

 

[techmaven]

Either you really are drinking the Kool-aid or you own shares in both TSLA and SCTY. Even if you believe the synergies are real, SCTY could have acquired for pennies on the dollar in a few months.

While I am inclined to think that is true, if the ramp for TE is very real for early 2017, there might not be time anymore to wait until that point.

 

[ClownMouth]

Tesla has obviously had enough analyst calls that any misconception that the market might give positive special treatment to information coming directly from Elon has been made clear. JB and Wheeler are comfortable speakers and speak in a manner that is much more consistent with what analysts/investors can understand. Why JB or Wheeler don't voice the majority of the company's thoughts (even though we can all agree they are likely coming from Elon's mind) remains a mystery. It's not like anyone is going to stop Elon from chiming in when he wants should he choose to expand on something JB or Wheeler says.

 

[anticitizen13.7]

I've heard this before. Several times actually.

You really believe that Elon hasn't thought this out? Really?! Come on, you've got to be kidding me.

I can only guess, though I think it's a pretty good guess, that the primary reason so many are upset is because it affects their stash of cash in the moment and/or immediate future.

Yeah, but who's voting on the acquisition?

If Elon wants this to happen, he has to convince the voting shareholders. Making a vague pitch and not answering questions on a conference call is not a good way to do this.

The issue IS NOT what Elon thinks, but what the voting shareholders think of this proposal. As for cash, I don't consider TSLA or any other equity to be "stash cash". Outside of an FDIC insured bank account, only a MMMF can really be considered cash.