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glhs272
Unnamed plug faced villian
I apologize in advance for my amateur hour questions...
So if this merger goes through, would this be considered a forced sale of my shares? For instance.. If I have an average share price for $35 and Tesla buys solar city for $25 a share. I am effectively forced to take a loss on these shares at $10 per share... Can I claim capital loss on my taxes? Would I have to sell my shares before Tesla buys them?
So if this merger goes through, would this be considered a forced sale of my shares? For instance.. If I have an average share price for $35 and Tesla buys solar city for $25 a share. I am effectively forced to take a loss on these shares at $10 per share... Can I claim capital loss on my taxes? Would I have to sell my shares before Tesla buys them?
The shares won't be bought, but simply converted to Tesla shares, so there shouldn't be any loss or gain to report unless you sell first, aside from any small sale of fractional shares that can't be converted.
glhs272
Unnamed plug faced villian
So basically I would be way overpaying for Tesla shares? Or, if I sell today I can claim a capital loss then just go ahead an buy Tesla shares or some other company shares?
Edit: I hadn't given much thought to sell strategies. As I am young and have been more concerned with just finding good buying opportunities. This seems to have potentially changed things and I just want to make sure I am not making worse moves than I already have.
Edit: I hadn't given much thought to sell strategies. As I am young and have been more concerned with just finding good buying opportunities. This seems to have potentially changed things and I just want to make sure I am not making worse moves than I already have.
Yes, you just over-paying for Tesla, but not much more than if you had purchased Tesla at a higher price a few months ago. I am not entirely certain about how claiming a capital loss would work if you buy Tesla and Solar City is then converted to Tesla in the near future, but I imagine that what you said may be ok, at least if the deal takes some time to go through.
TheTalkingMule
Distributed Energy Enthusiast
Can anyone give some insight on the market for 2018 SCTY call options moving forward? Looks to me like there was some minimal movement at the far-out-of-money range today at very low prices(for obvious reasons).
Does the market for LEAPs adjust to the likelihood of a merger? In other words, is it going to be wildly cheap to buy $80+ 2018 calls on SCTY since there's at least a chance they will be rendered nearly worthless within months?
Just took a look and it appears at least 1 contract $75's were bought at $.01 today. Am I misreading this board? $115's @ $.05 and most others unchanged with no volume.
Does the market for LEAPs adjust to the likelihood of a merger? In other words, is it going to be wildly cheap to buy $80+ 2018 calls on SCTY since there's at least a chance they will be rendered nearly worthless within months?
Just took a look and it appears at least 1 contract $75's were bought at $.01 today. Am I misreading this board? $115's @ $.05 and most others unchanged with no volume.
doggusfluffy
Closed
I was also just wondering what would happen to SolarCity employee stock options. I was thinking about Lyndon's performance benchmarks like Elon has with Tesla.
GBleck
Member
Did anyone else notice that Elon mentioned the integration of the inverters into the power wall? If you have a unified car charger, power wall and panel system tied to the grid I would imagine you have an opertunity to deduplicate some hardware.
Even if they are designed to work together having separate product support chains even if they are subsidiary companies owned by a parent is one of my least favorite things. Having a unified point of contact for support and sales is one of my favorite things when I make purchasing decisions. From a brand perspective this makes tesla more attractive as a one stop shop for your total energy needs. Solar and a mix of other sources replacing combusted old dead things is inevitable at some point. If you don't believe this I can't fathom why you would own either stock. If you accept this and you actually accept the stated goal of accelerating the inevitable future of sustainable transport then the merger makes sense... at least to me.
Even if they are designed to work together having separate product support chains even if they are subsidiary companies owned by a parent is one of my least favorite things. Having a unified point of contact for support and sales is one of my favorite things when I make purchasing decisions. From a brand perspective this makes tesla more attractive as a one stop shop for your total energy needs. Solar and a mix of other sources replacing combusted old dead things is inevitable at some point. If you don't believe this I can't fathom why you would own either stock. If you accept this and you actually accept the stated goal of accelerating the inevitable future of sustainable transport then the merger makes sense... at least to me.
A home solar system using major brands can be repaired by any competent solar company. Just like a Camry. A Tesla home solar system will likely need to be repaired by Tesla. Just like a Model S.
A grid attached solar system is the least critical appliance in the home. I am more impacted about my coffee machine not working in the A.M. compared to the solar system.
gigglehertz
Member
I suppose that would be one hell of a lottery ticket if the merger doesn't go through! Hmm I should look at that...
Well the ratios quoted in the announcement indicated SCTY was valued at 26.5 to 28.5 so selling now would be a mistake. When the news was first announced the after hours stock prices went all screwy and I thought about doing exactly what you talked about. By opening yesterday the market had corrected that imbalance and my amateurish back of the envelope math said it no longer made sense - I will wind up with more shares of TSLA if the deal goes through. If the deal doesn't happen I stand to make more money if/when a short squeeze happens when Solarcity gets to cash flow positive.
I'm not an expert, but I think the best course of action right now is to wait and see what happens.
I expect we will get a letter inviting us to vote, in a number of weeks from now. The companies have to do some due diligence, which takes a bit of time, but after that all shareholders of both companies will get to vote on the precise proposal. Note that a significant amount of shares are held by big institutions, in TSLA as well as SCTY, apart from Elon's holding and a few more who will abstain due to conflicting interests.
That's my take.
Edit to add: I hold both scty and tsla, about 3:100. (Just added a few tsla today
I thought about this again and I'm really torn. I've always thought Solarcity and tesla were synergistic companies that would be hand in glove all the way through maturity decades from now. A combine is a natural move and I expected something like it to happen.
However, this offer is extremely low balled and it insults Solarcity investors most of which Will come out far worse on this deal then ever expected as long term(even medium term) investors.
I feel like when Elon opined about PayPal being forced to sell because they couldn't exist on their own under the ubiquitous overlord EBay. It was "you will be assimilated or die trying to compete" and that was that and the sale went through. At least they got a pretty good value for being assimilated.
How the tables have turned with Elon in this respect, but I dare say far worse. He's saying "you will be assimilated and at the multi year low,worst possible value for you."
This is a terrible exchange of stock. In order to vote yes, Solarcity investors must demand a better deal or wait till they can afford true value exchange.
I can't see a scenario where most medium and long term Solarcity investors aren't losing significantly on this deal if it goes through as is.
Peter rive drops from (rough math)approximately 2,500,000 shares of Solarcity to about 300,000 tesla shares. I can't imagine what the rest of the key management like tanguy Serra and the others are thinking right now other than a massive, massive salary raise into millions a year as compensation.
Again, the terms are terrible for Solarcity investors as is. At a minimum, a doubling of the offer would be negotiable in my opinion. Bottomline, the deal is far from fair and Solarcity investors should pump the brakes on a positive vote until a wildly better offer is served up.
I've concluded I really really like the idea of the aquisition, but I really dislike the deal terms.
However, this offer is extremely low balled and it insults Solarcity investors most of which Will come out far worse on this deal then ever expected as long term(even medium term) investors.
I feel like when Elon opined about PayPal being forced to sell because they couldn't exist on their own under the ubiquitous overlord EBay. It was "you will be assimilated or die trying to compete" and that was that and the sale went through. At least they got a pretty good value for being assimilated.
How the tables have turned with Elon in this respect, but I dare say far worse. He's saying "you will be assimilated and at the multi year low,worst possible value for you."
This is a terrible exchange of stock. In order to vote yes, Solarcity investors must demand a better deal or wait till they can afford true value exchange.
I can't see a scenario where most medium and long term Solarcity investors aren't losing significantly on this deal if it goes through as is.
Peter rive drops from (rough math)approximately 2,500,000 shares of Solarcity to about 300,000 tesla shares. I can't imagine what the rest of the key management like tanguy Serra and the others are thinking right now other than a massive, massive salary raise into millions a year as compensation.
Again, the terms are terrible for Solarcity investors as is. At a minimum, a doubling of the offer would be negotiable in my opinion. Bottomline, the deal is far from fair and Solarcity investors should pump the brakes on a positive vote until a wildly better offer is served up.
I've concluded I really really like the idea of the aquisition, but I really dislike the deal terms.
TheTalkingMule
Distributed Energy Enthusiast
Well we can't have it both ways. If 2016 sales costs were $.35/W as expected, SCTY would have no issues at all. $.91/W sales cost makes the model unsustainable as solar continues to advance toward scale in the US. I mean, I can get a quality install in my immature market for $2.75/W all-in.
IMO taking SCTY operations under the Tesla umbrella will add the scale and branding necessary to negate almost all that sales cost. That makes Tesla PPA immediately the best choice(as it already is) and profitable. SCTY gets to keep moving much more cheaply and TSLA gains the future largest energy provider in the US. When this org splits in 3-5 years, Tesla Energy could very easily be worth more than Tesla Motors.
The other option is to take their foot off the gas even further to cut costs. Elon does not see this as a viable option as it screws with his vision, plus we already saw what cutting out of Nevada did to the balance sheet for 1Q16. It drove sales cost to $.91/W which is the very thing making financing more difficult and expensive. The negative feedback loop from there could be problematic and require a cash infusion. I'm sure none of that is appealing to Elon either.
This the beginning of yet another all-in move by Elon. I'm taking a both on my LEAP options, but I'm not about to complain or bet against Elon's eventual success. I will vote to merge even though it's not in my interest because sticking to Elon's vision is of paramount importance.
Well, at least a SCTY bull being as unhappy about the offer as a lot of the TSLA bulls suggests to me that it actually is a fair deal for both companies.
As I understand it (not very much) the deal will not happen today or next week, but due to Elon's special ownership he is obliged to give official and advance warning, as well as recluse himself from the actual deciding vote. Which I guess will happen one or more months or quarters from now. What the two companies' shares are worth on that day is still an open question, to my mind, and that's probably why the exchange rate was given as a range instead of a fix number. It does mean they will trade in tandem for that duration.
But like I said, this is certainly not my field of expertise, I only try to assimilate some wisdom from this forum and other sources. Which I do consider the wise thing to do, if one can't research more directly -- in which case we are very greatful for a crumb or two!
But like I said, this is certainly not my field of expertise, I only try to assimilate some wisdom from this forum and other sources. Which I do consider the wise thing to do, if one can't research more directly -- in which case we are very greatful for a crumb or two!
I *think* SCTY options would be changed into TSLA options with goofy strike prices (based on the conversion factor). Interesting to consider if the offer was a cash offer at 25/share out of the money leaps would be basically garbage (if the deal goes through there is no chance of them ever being in the money). Something to think about for small companies.
The only reason s,g&a are up is because of the Nevada debacle. Nevada market was shut down in literally one day and they had something like 40mws-80mws of bookings here at that point. That was a significant blow at the time and also was a significant blow to being able to predict for quarterly projections in addition to the uncertainty California net metering decision had on estimating installed MWs. The costs were spread over the MWs so q1 was an anomaly due to this illegal disruptions in Nevada.
I expect you know this. It is interesting to me so many of us have amnesia when it comes to context of these numbers. The whole point of reducing costs was to be ready for the ITC step down, but the ITC was unexpectedly extended at full 30% thru 2023... The the cost reduction pressure is far less right now as well given the context of of this so a bump up because of an anomalous Nevada decision doesn't change the fact Solarcity is a solidly building out a network of extremely valuable revenue generating assets profitable year one.
I feel if Solarcity had a better media engagement team they could really shutdown all the disinformation/propaganda/trolling that infests the financial news outlets including some mainstream media. When everything you learn about Solarcity comes out of the mouths of Jim chanos and Jim Cramer there is something really wrong in the world.
Bottomline, financials in context are very solid .
I'm both a scty bull and tsla bull. I own both. I love the aquisition, but hate the terms. Scty is getting shafted. Tsla is getting stroked. Terms have to be changed or scty investors will revolt (since the fix is in on the yes vote already).
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