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Solar City IPO

daniel

Well-Known Member
May 7, 2009
5,160
4,380
Kihei, HI
I'm very interested! As with Tesla, I'd be buying a small number of shares (not more than a few thousand dollars worth) but I want to have a finger in this. The big question is, whether to buy in at the IPO, assuming that's even possible for a small investor, or to wait for the price to settle a bit. I'll have no way of knowing whether the IPO price is high, low, or just about right.

But I think Elon is an extremely competent businessman, and I think that solar power is a socially beneficial industry.
 

woof

Fluffy Member
Supporting Member
Apr 30, 2009
1,588
1,904
The SolarCity IPO has been talked about since last April. There are possibly some accounting issues to work through before they go public.

Check out this chart:
oddity-small.png


Which comes from this blog post:
Outliers Oddities - State of SoCal Solar 2012 - Part 3

From the post:
“There is this question of how do you account for something when it’s a lease,” Musk said. “Not all of them are structured in the same way. We want to just double-check with our auditors and the SEC before we file to make sure the accounting is correct.”

Rumor has it that the SolarCity IPO may have stalled over concerns by the SEC regarding those very accounting practices.

Once those issues are worked out, I'm in.
 

mitch672

Active Member
Jul 1, 2012
1,861
15
Stoughton, MA
I am just putting in my 2 cents here, and stating this is %100 pure speculation, and I have no links or actual data to backup any of this, so please no flaming about this.

It's entirely possible that the need for this IPO is closely related to the Tesla SuperCharger announcement/deployment.

Tesla is procuring sites for the 100 initial SC sites, Elon has stated many of them will be equipped with Solar canopies, that will be provided by SolarCity. There is also construction work involved with each site, much of it is electrical such as dealing with the myriad of electric utilities across the county, placing large 300-500KVA pad mount transformers, etc. SolarCity is really a photovoltaic contractor/installer. Perfect to deploy this infrastructure, but they currently don't have a nationwide footprint. Elon needs them to expand... Tesla also feeds business to SolarCity to install 14-50s and WHPC2s in their Model S customers homes. Another reason for the SolarCity expansion.

Capital will be needed to pay for the initial hardware for all of those solar canopies and electrical work/construction of the SuperCharger sites, hire new electricians and new offices for the entire U.S., they need to go nationwide.

The sites will generate positive cash flow by generating power, more than the site uses for quite a while, until many more Model S's are mfrd/delivered, so SolarCity could see an early return on the capital they use to build out the sites.

Also, not sure anyone has picked up on this, but the gentlemen running SolarCity are Elon's cousins, so it's a very close relationship between the two companies.

It all makes sense, when you put all of the facts/data together that we know about.
 
Last edited:

Citizen-T

Active Member
Aug 25, 2011
2,443
105
Raleigh, NC
I am just putting in my 2 cents here, and stating this is %100 pure speculation, and I have no links or actual data to backup any of this, so please no flaming about this.

It's entirely possible that the need for this IPO is closely related to the Tesla SuperCharger announcement/deployment.

Tesla is procuring sites for the 100 initial SC sites, Elon has stated many of them will be equipped with Solar canopies, that will be provided by SolarCity. There is also construction work involved with each site, much of it is electrical such as dealing with the myriad of electric utilities across the county, placing large 300-500KVA pad mount transformers, etc. SolarCity is really a photovoltaic contractor/installer. Perfect to deploy this infrastructure, but they currently don't have a nationwide footprint. Elon needs them to expand... Tesla also feeds business to SolarCity to install 14-50s and WHPC2s in their Model S customers homes. Another reason for the SolarCity expansion.

Capital will be needed to pay for the initial hardware for all of those solar canopies and electrical work/construction of the SuperCharger sites, hire new electricians and new offices for the entire U.S., they need to go nationwide.

The sites will generate positive cash flow by generating power, more than the site uses for quite a while, until many more Model S's are mfrd/delivered, so SolarCity could see an early return on the capital they use to build out the sites.

Also, not sure anyone has picked up on this, but the gentlemen running SolarCity are Elon's cousins, so it's a very close relationship between the two companies.

It all makes sense, when you put all of the facts/data together that we know about.

Nah, the timing is pure coincidence. They've been trying to get this IPO out since the spring but got held up by some accounting issues that the government wanted to spend more time on.
 

mitch672

Active Member
Jul 1, 2012
1,861
15
Stoughton, MA
Nah, the timing is pure coincidence. They've been trying to get this IPO out since the spring but got held up by some accounting issues that the government wanted to spend more time on.

There are no coincidences, while its true they announced they planned on going public in April, they were waiting for the SEC clearance, and a compelling reason to raise more Capitol. Nationwide footprint, combined with 100 solar canopies/SC sites, and the ramp up of Model S deliveries (they get recommended for the clients electrical work), are all good reasons to do it now.
 

vfx

Well-Known Member
Aug 18, 2006
14,790
47
CA CA
Nah, the timing is pure coincidence. They've been trying to get this IPO out since the spring but got held up by some accounting issues that the government wanted to spend more time on.


And Tesla was going to make the Supercharger announcement in July.
 

Citizen-T

Active Member
Aug 25, 2011
2,443
105
Raleigh, NC
And Tesla was going to make the Supercharger announcement in July.

There's no way that Solar City, a completely separate company, moved its IPO based on Tesla's schedule slip. I think you guys are imagining a much stronger connection between SC and Tesla than actually exists. Even with this supercharger install Tesla is a small customer, it just doesn't make any sense for them to change their plans based on what Tesla does.

Besides, even if this gig was so huge it warranted an IPO, there's no reason that they needed to wait until now to do it. They could have done it a few months ago and held onto the cash. Or hey, they could just charge Tesla enough to cover the cost of building these things (which is what I'm sure is happening) and not need an IPO at all.

No, I don't buy it. No connection here. When you are on the board of three companies sometimes you have months where stuff happens at more than one. I mean, the Model S launch was in the same week as the space station docking. Nobody thought it odd that that got delayed onto the same week as the car launch.

I mean show me some facts and I'm willing to change my mind, but all I see is the makings of a mediocre conspiracy theory here.
 

bonnie

I play a nice person on twitter.
Feb 6, 2011
16,429
9,933
Columbia River Gorge
There's no way that Solar City, a completely separate company, moved its IPO based on Tesla's schedule slip. I think you guys are imagining a much stronger connection between SC and Tesla than actually exists. Even with this supercharger install Tesla is a small customer, it just doesn't make any sense for them to change their plans based on what Tesla does.

Besides, even if this gig was so huge it warranted an IPO, there's no reason that they needed to wait until now to do it. They could have done it a few months ago and held onto the cash. Or hey, they could just charge Tesla enough to cover the cost of building these things (which is what I'm sure is happening) and not need an IPO at all.

No, I don't buy it. No connection here. When you are on the board of three companies sometimes you have months where stuff happens at more than one. I mean, the Model S launch was in the same week as the space station docking. Nobody thought it odd that that got delayed onto the same week as the car launch.

I mean show me some facts and I'm willing to change my mind, but all I see is the makings of a mediocre conspiracy theory here.

+100.
 

Bardlebee

Member
Apr 4, 2012
599
1
San Antonio, TX
I'm pretty excited for this IPO. I don't know very much about the solar energy industry, though the way they go about it seems safer for now as there isn't a huge ramp up of solar panels being installed. I think, for the long term, investing in this company looks good. 5+ years from now it could be very profitable, but like many technologies, the company could be dead in the water too. A gamble I suppose. :)
 

VolkerP

EU Model S P-37
Jul 6, 2011
2,464
27
Germany
As I understand it, SolarCity is not in the solar equipment manufacturing business. Instead, they provide services to assess installation sites, install equipment, and run solar installations. Equipment manufacturers are just a supply chain for them - totally interchangeable and not tied to any special technology.
They are by far more affected by changes how solar installations are rebated and solar electricity is sold. As of today, they would be out of business without these incentives.
Solar electricity generation still has to reach a price point where it becomes a economical business case all on its own.
 

UMD86

Member
Oct 20, 2012
269
2
USA
My 2 cents
-----
The IPO is Tuesday. There's a glut of solar panels (PV) on the market (thanks to the Chinese) which means they are more affordable than before. SCTY's business model is to finance the installations with their customers so they don't have to pay a huge outlay of cash for the panels and installation. Solar City will own the installation and charge the end user a monthly fee. They also get to keep the Federal and State Gov't tax credits. It could a good long term investment. I believe they are the first "installation" company to go public so there's no real history on their specific industry. I plan to own a few shares and see with happens. Musk is the Chairman and his cousins own the company. They're in expansion mode throughout the US which means they will be burning a lot of cash. One thing for sure is that Elon will not let this company go down. He has too much smarts and pride and will guide this company.
 

Bardlebee

Member
Apr 4, 2012
599
1
San Antonio, TX
If I am understanding it correctly I believe Solar City opens tomorrow. Who is considering buying tomorrow? Is it wise to purchase on IPO day? I have read just a few articles and they tend to say it may be a bad move, unless your long on that stock. I need a GOOD investing book I can sit down with and read for noobies. :)

EDIT: OH dang, didn't notice my post got moved above. I asked this question above. Sorry.
 

JRP3

Hyperactive Member
Aug 20, 2007
20,832
50,746
Central New York
I might grab a handful of shares early, if I can, and then wait and see if there is the initial run up and dump that I expect, as there was with TSLA, and then maybe pick up some more on the pull back.
 

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