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Possibly. In a way I agree with Elon. No one is going to offer more than $2.6B for Solarcity. It is probably worth much less and only Tesla may make it work because it is in a unique position to leverage its brand recognition to help push its products through what formerly was Solarcity.
Listen to the call. 'Better' most certainly referred to the financial part of the deal. At the same time I agree no one is going to outbid Tesla. The price is already too damn high.
Krugerrand
Meow
Naïve.
For many companies in SCTY position, money rules the decision. That's not the case here. SCTY has a mission and also cares about its family (employees) and their future. 'Better' doesn't simply mean more money.
Adding: your original post on this topic was to chide Elon for essentially 'lying' about his reason for Tesla to merge with SCTY. I did listen to the call. To believe you're position one would have to disregard his opening statement. You'd also have to disregard what Lynden said in his opening statement, and what Jason Wheeler said etc...
A better deal isn't simply about more money for these people. And I'm pretty sure you're aware of that, but it doesn't fit your personal feelings on the topic of these two companies and the people involved in them.
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racer26
Active Member
That was a rather interesting reaction out of the open... I was under the impression that the merger was built into the SP, now that it looks like it may be going through, TSLA drops a little? Hmmm. I'd think it would go up since they may very well acquire SCTY for less than initial bid, sounds like fantastic news to me? 
racer26
Active Member
That was a rather interesting reaction out of the open... I was under the impression that the merger was built into the SP, now that it looks like it may be going through, TSLA drops a little? Hmmm. I'd think it would go up since they may very well squire SCTY for less than initial bid, sounds like fantastic news to me?
I think it was just the market adjusting the two of them to the 0.11 rate. They're travelling together more or less now. Seems like this has overshadowed whatever positive impact the Gigafactory party might have had.
Once they adjusted, they started heading back up together. I think the knee-jerk reaction was "SCTY is getting a worse deal than initially offered, sell SCTY", and now that people are starting to think about it, the total greater than the sum of its parts nature of this is starting to prevail.
JRP3
Hyperactive Member
CALGARYARSENAL
Member
I think we are going to see a reversal into the green. EXTREMELY bullish. One of the next couple earnings calls is going to be a beat. Financial engineering....done.
That was a rather interesting reaction out of the open... I was under the impression that the merger was built into the SP, now that it looks like it may be going through, TSLA drops a little? Hmmm. I'd think it would go up since they may very well acquire SCTY for less than initial bid, sounds like fantastic news to me?
SCTY news is not the only trading point today. Some traders have ridden the stock up through the gigafactory reveal and are lightening the load a bit prior to 2Q ER.
An interesting tidbit from the call is that Tesla stores see 3M customer visits in a year. Given that sales level is currently at an annual run rate of about 100K units, there is one sale per 30 visits. Does anybody have data to compare this metric with the conventional automotive dealerships?
I agree SCTY was adjusting to the ratio at the open. I think TSLA went down as weak longs and shorts piled in to the uncertainty, as always. Significant news without a super clear headline always triggers an initial selloff--part of being a highly shorted stock. I disagree that they will head up together, though. SCTY is stuck around this price until the deal goes through or a competing bid is made. I believe the ratio has been fixed and it is not a rolling average of TSLA SP, it's from the past 5 days and will not change. Thus, SCTY is pegged to current price and TSLA is free to move wherever it wants. Ultimately, the market should like the deal for TSLA once the dust settles - it got a pretty good discount off the initial range since the TSLA SP has increased 7% from the day the deal was offered.
CALGARYARSENAL
Member
Lightening up at this stage could cost you the largest move of the year. If your an investor, trading around this stock is a disaster. Nobody knows what will happen. This will be understood if we turn green today after being down 2%.
Krugerrand
Meow
What company on this planet is positioned to offer a stationary solution to Solar City of the same scale and breadth as Tesla? With a comparable world mission/headed in the same direction? With better groundwork laid for batteries? With a better sales and distribution network now and in the future? That's as keen on vertical integration? And has financial backing to see it all through?
I'll wait...
racer26
Active Member
Exactly... the *ratio* has been fixed. Not the price. If they don't move together within a band of 0.11+/-a bit, that would indicate the market thinks the deal isn't going through.
Side note - interesting that Tesla used Wachtell (law firm) for the deal. Rest assured they had the best possible representation in the industry. Wachtell is literally the best (and most expensive) law firm in the world. It's the type of place you hire when doing "bet the company" M&A and you absolutely, positively have to get it right. I've worked with them quite a bit and they work as hard as Elon does on every deal.
This should give investors confidence that the deal was conducted at arm's length and that TSLA worked hard to get the best merger agreement possible for its shareholders.
This should give investors confidence that the deal was conducted at arm's length and that TSLA worked hard to get the best merger agreement possible for its shareholders.
racer26
Active Member
Listening to the call this morning, the other thing they said that stuck out to me was that they had every intention of announcing the record date well in advance of voting.
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