I really don't get it. I bought in around the IPO and now it's almost the same price!?! The company has only grown, become the number #1 installer in the nation, first solar company to secure bonds.....do the analysts not read up on where the energy industry is going? Son of a bit.....but I'm not going anywhere because I understand the end game. Might buy more now.
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I'm really tired of the whole "local installers is cheaper" excuse. Here in TX, no they are not! They don't have half the advantages as Solarcity in this state.
I've called around a lot (which became exhausting when having to go through the same "roof setup process" for every company estimation) and none of them have financing. I'm not taking out another loan for panels. SolarCity's model can and does work.
So maybe that works in very small areas, but obviously they are the #1 installer for a reason.
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For those who want to throw up.
I'm going to leave this right here.
Swarms of workers turning SolarCity into complex panel factory - Strictly Business
I'm going to leave this right here.
Swarms of workers turning SolarCity into complex panel factory - Strictly Business
It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, and comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows the great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who know neither victory nor defeat.
Every time I read this I think of Elon Musk, risking his entire wealth on Tesla.
Tomorrow, I'm buying SCTY.
Every time I read this I think of Elon Musk, risking his entire wealth on Tesla.
Tomorrow, I'm buying SCTY.
The Court of history may well deem to be Supremely on the wrong side
http://www.cnbc.com/2016/02/09/us-supreme-court-blocks-obama-carbon-emissions-plan.html
http://www.cnbc.com/2016/02/09/us-supreme-court-blocks-obama-carbon-emissions-plan.html
Nobody should vote against climate change plans since the 5 part article on ExxonMobil came out. Zero. You don't want to vote against the profit making machine? Then come up with a plan to move those jobs over to the clean energy side.
Profits. Blinded by profits. People live for what, 70-80 years? The people working right now will retire in the age of cheap renewables. No other generation will be going into the coal or gas industry. Freaking ridiculous.
Why can't we be proactive as a nation!?!
/rant
jhm
Well-Known Member
Well, I wanted to take the time to read the materials and listen to the call before reading and replying to posts.
No question Q4 was a tough quarter with so much drama and lost jobs in Nevada. Hitting 272 MW instead of 280 MW is not something I'd worry about. In general, SolarCity is working hard to be much more buttoned down. So 180 MW guidance is totally justified sandbagging considering the BS the manipulative traders have put the stock through. So 1.25GW is quite doable, especially with ITC extended. Driving to becoming cash positive in 2016Q4 is the right sort of way to moderate growth. I think SolarCity will be able to hold their market share, while pitching that to solid financial gains.
So I think this is realistic and sober minded strategy. For me, I am content to pass on the hypergrowth. If SolarCity is able to keep growing at 40% into 2017 and beyond on a cash flow positive basis, that will be a tremendous transformation. I believe the market will respond to this in time. 2016 can be a year of transition. As an election year for a political stock, 2016 is a wash from the outset. So I think the way to look at this year is how SolarCity will emerge in 2017.
There is little doubt in my mind that solar will be a solid growth story so long as fossil fuels are used for power generation. So the question is whether SolarCity will emerge a prime investment vehicle to deliver that growth. They are off to an amazing start with 1/3 market share and the infrastructure to deliver the lowest cost of installation. It is the Amazon of the retail power market.
On a minor note, I did the math on the current parameters for new contracts, 1347 hours/year, 12 c/kWh, only 2% escalator. This works out to a customer price of just $2.77/W or if you back out 30% ITC, $3.95/W. This is a reduction from the prior quarter where comparable calculations lead to $3.14/W net of ITC and $4.49/W. So this looks like SolarCity is bringing more competitive prices to the market, but with a higher mix of commercial it may not be quite so pronounced. In any case, even with a higher skew toward commercial, SolarCity is moving toward delivering lower priced solar.
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Wonderful. Thanks.
No question Q4 was a tough quarter with so much drama and lost jobs in Nevada. Hitting 272 MW instead of 280 MW is not something I'd worry about. In general, SolarCity is working hard to be much more buttoned down. So 180 MW guidance is totally justified sandbagging considering the BS the manipulative traders have put the stock through. So 1.25GW is quite doable, especially with ITC extended. Driving to becoming cash positive in 2016Q4 is the right sort of way to moderate growth. I think SolarCity will be able to hold their market share, while pitching that to solid financial gains.
So I think this is realistic and sober minded strategy. For me, I am content to pass on the hypergrowth. If SolarCity is able to keep growing at 40% into 2017 and beyond on a cash flow positive basis, that will be a tremendous transformation. I believe the market will respond to this in time. 2016 can be a year of transition. As an election year for a political stock, 2016 is a wash from the outset. So I think the way to look at this year is how SolarCity will emerge in 2017.
There is little doubt in my mind that solar will be a solid growth story so long as fossil fuels are used for power generation. So the question is whether SolarCity will emerge a prime investment vehicle to deliver that growth. They are off to an amazing start with 1/3 market share and the infrastructure to deliver the lowest cost of installation. It is the Amazon of the retail power market.
On a minor note, I did the math on the current parameters for new contracts, 1347 hours/year, 12 c/kWh, only 2% escalator. This works out to a customer price of just $2.77/W or if you back out 30% ITC, $3.95/W. This is a reduction from the prior quarter where comparable calculations lead to $3.14/W net of ITC and $4.49/W. So this looks like SolarCity is bringing more competitive prices to the market, but with a higher mix of commercial it may not be quite so pronounced. In any case, even with a higher skew toward commercial, SolarCity is moving toward delivering lower priced solar.
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Wonderful. Thanks.
gigglehertz
Member
jhm
Well-Known Member
This thing will trade like crap for at least another year. So I'd recommend you feather in your investment over time, just buying a little bit at a time. I think their will be plentry of buying ops along the way.
All the best.
TheTalkingMule
Distributed Energy Enthusiast
Almost forgot there was some great irony to the CNBC coverage of the SCTY earnings report today. As I mentioned before, Kevin O'Leary from Shark Tank was on the show commenting on the day's oil/bank volatility and made a big prediction. Said he's betting on a decoupling of the stock market from oil in very short order and that betting on stocks that will benefit from low energy costs will be the obvious smart move that pays off as oil shoot back up. SCTY's AH action is announced and he proceeds to say that no one should ever invest in a stock that can lose 25% of it's value in ten minutes. Asked if he would think of investing in the company.....he had no answer. Clearly had no idea what SCTY does.
I was worried that jhm would throw something at his TV when they mentioned oil decoupling and SCTY as if they were unrelated.
I was worried that jhm would throw something at his TV when they mentioned oil decoupling and SCTY as if they were unrelated.
jhm
Well-Known Member
Ok, I see what you are doing. In the first case you are assuming that the option is worthless at expiry, so that leads to an underestimate of expected yeild. In the second case you are subtracting out the value of the option at the front end which does not have the same bias as the first case. So it is an apples to oranges comparison. But to your basic conclusion, the yeild seems high however you estimate it.
It does take special pricing models to properly value a bond with embedded options. It is a non trivial exercise.
Could it be that these are too illiquid to be given a fair price? The prices offer may not actually represent a solid credit analysis and may just use the stock price as a proxy. Indeed there is a whole bond valuation methodology based just that. It views debt as a put option on the value of the enterprise and stock as a call option on the same underlying value of the enterprise. Once you have an estimate of enterprise volatility assued to be the same as for the stock, you can work backwards to derive a value of the bond frome the value of the stock. Now in the case of SolarCity you have a very complex capital structure with tax equity partners and ABSs so the simple KVM approach is probably way off base. So if there is not proper analysis going into these bond prices, you could just be looking at the stock price and its volatility through fun house mirrors. This debt could be just as mispriced in the bond market as the stock is in the stock market because that's essentially what it is based on.
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Let me see if I get this right. This guy says oil will decouple from stocks. So if you investing in stocks that benefit from cheap energy, they will do well when oil goes back up. That last part is where I get confused. I would think the point of investing in these cheap oil beneficiaries is that they will go up as oil remains low priced.
This decoupling will not take place as long as idiots think oil will shoot back up. It won't, and yet most companies will do just fine in a low oil world. The play is to dump the losers that only do well when oil goes up because as I said it won't.
So where's my shoe to throw?
BTW, IEA expects oil consumption to grow 1.2 mb/d this year, and OPEC production to grow 1.7mb/d. See the problem. The only way for oil supply and demand to balance this year, is for non-OPEC producers to give up market share. It's not going to happen. The glut will persist into 2017 and so will low prices. We can't let these oil producers locked into a pissing match with each other ruin every other investment on the planet.
gigglehertz
Member
Understood. I'm embarrassed to say how little I actually have in my 401k. It's not like it's a significant amount, just that it's enough to borrow half and bump me up to my target number of shares for my mid range plans. Nobody knows what any stock will do tomorrow or short term, but my faith in any Elon Musk adventure is absolute, and I'm willing to throw it all onto the table. I am not worried about the long term viability of Solarcity at all. I'm no accountant, and I can't counter SBenson at all, but I will roll the dice on them not going bankrupt, or facing a margin call, or any other disaster scenario. You can call me naïve, or a koolaid drinker, or whatever, I don't care. My goal is a certain number of shares, then sit back and let the excitement unfold.
TheTalkingMule
Distributed Energy Enthusiast
I'm perfectly happy to sacrifice my 2017 SCTY options and a bit more of our beautiful environment if it means frackng our way into 2018 and triggering a Saudi revolt. But that's a whole other topic.
TheTalkingMule
Distributed Energy Enthusiast
How do LEAP options reprice with a drop like this? Obviously they'll be way down, but does the volatility mean it takes a while for them to really bottom out to rational price?
Hardly and point in buying anything other than share when they're at 18, but I'd still like to do the math on the leverage.
Hardly and point in buying anything other than share when they're at 18, but I'd still like to do the math on the leverage.
jhm
Well-Known Member
Delta is the ratio of the change in option value to change in stock price. But I would also expect the implied volatility to shift as well, so it will be hard to anticipate how this all sorts out. It's not even clear if implied volatility will increase or decrease. Usually there is a decrease after ER, but with a big price change maybe not.
FWIW, I've got a limit order set up. Let's see what discount the market will cough up.
SolarCity Townhall meeting is the 11th. SolarCity Town Hall
I'll not be able to listen to it. I'll be driving to Fremont for a morning Tesla factory tour on the 12th. I'm looking forward to seeing X's being manufactured at Tesla! I could use a dose of confidence.
I picked up another 1,000 shares SCTY at $19.26 this morning, couldn't resist.
Fingers crossed for a pleasant surprise on TSLA ER.
I'll not be able to listen to it. I'll be driving to Fremont for a morning Tesla factory tour on the 12th. I'm looking forward to seeing X's being manufactured at Tesla! I could use a dose of confidence.
I picked up another 1,000 shares SCTY at $19.26 this morning, couldn't resist.
Fingers crossed for a pleasant surprise on TSLA ER.
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