I've thoroughly enjoyed the back-and-forth in this thread since Benson went ursual.
I've tried to do my own analysis but I'm having a really hard time seeing how/if SCTY's business plan stands on its own legs, without generally linking their specific business too much with the inevitable glowing (shining) future of solar in general. The new EVC metric has gotten me suspicious, Elon's huge purchases lately has made me a bit more confident again.
I hope the good debate and exchange of ideas can continue without the need for us to label anyone derogatorily even though they might hold the opposite sentiment at the time being.
That said I do believe SCTY as a stock is in a very vulnerable position to be manipulated in the current climate.
You bring up a number of interesting points. I couldn't resist responding.
Business Model:
Most people who will take time to review the actual numbers and piece the puzzle together will see that the business model is vulnerable to the impending policy changes. If people are investing based on:
- Solar gotta win, and hence SolarCity will win
- Elon gotta win, and hence SolarCity will win
- Batteries gotta win, and hence SolarCity will win
then sorry, tough luck. In the long run businesses grow through numbers, not hype and hope.
My Position:
I am not a bear, nor I turned bearish. All I have to say is that the probability of success (or failure) at this point is unknown. At this point going long or going short both positions are merely speculative plays in my view. I might have come across as overly bearish because the resident theme here is very bullish and I am countering with data/points on the other side.
To further, in my view two things will be decisive in ensuring outcomes in one direction or the other.
1) California NEM 2.0
Based on this either stock will either spike or plummet. I have no idea which way it will go. Hence I call it speculative to be in the game.
2) SolarCity cost measures
If Lyndon comes out end of this quarter and announces new cost targets and some additional EVC magic, that will do nothing. There is an Abraham Lincoln quote: You can fool some people all of the time or all people some of the time but not all people all of the times.
He has to show some solid progress in *real* numbers, like:
- Sales/Watt
- Opex/Watt
- Incremental NRV/Watt
- Incremental NNRV/Watt
- Cash burn and availability of funds
- Incremental NRV/Share
- Incremental NNRV/Share
If he shows solid progress in these type of numbers, the stock will spike. or else it will plummet. I have no idea which way it will go and hence I call it speculative.
Stock Manipulation
It's hard to tell what stock price means when you don't have conventional metrics. What does a price of $45 mean vs $35? I don't know, nobody knows. But luckily bonds trade around par values. You can tell a lot looking at the bond prices. If we take the 11/19 bond, it traded around par, between 90 and 100 pretty much all the time. Then starting in mid Aug it started a decisive trajectory downward. So we can tell that this entire turmoil really started in mid-August.
I went to SA, looked at all the "Breaking News" from mid Aug. Unfortunately I did not find any pattern. There were a mixture of good news and bad news all over the place. There was nothing concrete that matches the bond trajectory. But there was one thing interesting. The peak nearly matched Chanos' first announcement that he is short SCTY. Umm, is that a smoking gun??
So then I looked at the short interest in SCTY over the same time frame. There was a strong movement upward in August. But it's flat all through the rest. So then again the shorts increasingly shorting is not adding up.
In any case, summary is I couldn't find any patterns.
I would be very hard pressed to believe that manipulation can happen in a stock where there are about 5mil shares a day are being traded.
