Yea, but Elon and other TSLA-SCTY joint holders aren't voting here.
So why would the SCTY-only shareholders vote for this acquisition if it's really as bad as a deal you say, with supposedly such big factors coming up for SCTY's stock price?
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Yea, but Elon and other TSLA-SCTY joint holders aren't voting here.
So why would the SCTY-only shareholders vote for this acquisition if it's really as bad as a deal you say, with supposedly such big factors coming up for SCTY's stock price?
Solarcity just made it through almost a year of major political/regulatory challenges in Nevada, California, New York, Massechusets as well as the sudden ITC extension which made it difficult on predicting how the growth projections and quarterly numbers in my opinion.
This year they are solid with many of their major markets and the regulatory environment and this ought to continue through the next 2-3 year period. This next three year period is where energy storage and smart inverters get deployed in mass so Solarcity will have a massively more diverse portfolio that can make money off of each install in their portfolio. They will have net metering only customers, grid services customers with smart inverter, and grid service with customers that have smart inverters and energy storage... All of which Solarcity will generate revenue from energy sales to the customer itself, revenue for grid services for utilities, and total package micro grid application including management.
Solarcity's primary challenge has been the resistance of incumbent monopolies in the regulatory arena to allow them to compete at scale for consumer business and this has generally revolved around net metering and interconnection speeds/process.
For example you don't need a permit for an oil Derrick in California, but you need many to install solar on your roof. Solarcity said if they had the same permitting/interconnection process as Germany, they could literally meet a customer, design the system, install the system and interconnect within the two days. But that's not the case and you have long backlogs waiting for the permitting process and interconnection sometimes months at a time.
Solarcity is making big strides in getting state commissions to realize the value of solar and as this happens greater volume and market penetration happens at significant growth rates.
Solarcity just entered some regulatory stability and I expect them to take advantage of it after the past whirl wind year... On their own...
Brexit...
If dollar strong Solarcity wins big buying its Chinese/European panels which is the vast majority of its panels right now.
It important to note Solarcity is an American company with most all its installs happening in the United States (with some commercial happening in Mexico). Not much international business exposure to this event.
If this does affect the us economy, interest rates most likely won't get raised which is a tailwind for cheap finance in the future. Also, consumers may more likely to continue to choose lease/ppa to save on monthly energy bills under favorable net metering arrangements While limiting loan debt and increae home operation savings during austere times.
Strong dollar, low interest rates, stable policy in key markets, and US only business exposure bode well for Solarcity business if this Brexit affects our economy this way.
Now the stock...
If dollar strong Solarcity wins big buying its Chinese/European panels which is the vast majority of its panels right now.
It important to note Solarcity is an American company with most all its installs happening in the United States (with some commercial happening in Mexico). Not much international business exposure to this event.
If this does affect the us economy, interest rates most likely won't get raised which is a tailwind for cheap finance in the future. Also, consumers may more likely to continue to choose lease/ppa to save on monthly energy bills under favorable net metering arrangements While limiting loan debt and increae home operation savings during austere times.
Strong dollar, low interest rates, stable policy in key markets, and US only business exposure bode well for Solarcity business if this Brexit affects our economy this way.
Now the stock...
From what I've read, the key issue is volume. They'll convert into TSLA1 options, and these TSLA1 options will become *very thinly traded* after a merger. If you were holding to expiration or planning to exercise, no problem.
If you were planning to sell (...or buy back a short options position), you are going to lose out because the bid-ask spreads will be even larger than before and the market makers will make even more money off of you.
A SCTY option to buy 100 shares with a strike price of $80 would convert to a TSLA1 options to buy 12.2 (or 13.1) shares of TSLA for $655 (or $610) per share. Do you think that'll be worthless?
That's for you to determine...
This looks like a positive development for Solar City as it deals with unfriendly regulators and utilities in Nevada and some other states:
With Jon Wellinghoff, SolarCity looks to resolve net metering disputes in Nevada and elsewhere
GSP
With Jon Wellinghoff, SolarCity looks to resolve net metering disputes in Nevada and elsewhere
GSP
WTF???
Adding this bunch of backroom paper shufflers to TSLA??
SCTY only functions in (is a creature of) States with legislatively-provided tax breaks etc and then farms out the jobs to installation contractors. Ok, value being added and all that, but nothing *real* here to see. What does this have to do with making cars/batteries/power_devices? I see this as a massive economic misstep.
. . . climbs down off high horse.
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Adding this bunch of backroom paper shufflers to TSLA??
SCTY only functions in (is a creature of) States with legislatively-provided tax breaks etc and then farms out the jobs to installation contractors. Ok, value being added and all that, but nothing *real* here to see. What does this have to do with making cars/batteries/power_devices? I see this as a massive economic misstep.
. . . climbs down off high horse.
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What are you talking about? Solar City installs panels. Kinda ruins your argument.
One can easily see Tesla as a battery producer that happen to use part of their product in cars. In the absence of net metering it makes _a lot_ of sense to combine the battery business with the home solar business.
The stock price changes clearly deem this a bail out, but there is an additional, technically sound reason for Tesla to take over Solar City. But given the economic strength of the two companies, I think it is safe to say that Elon Musk is up to yet another risky move.
doggusfluffy
Closed
I was thinking about Elon's view of the world as it relates to this synergy he sees. Suppose you own this state of the art car factory, happen to prefer vertical integration and you wanted to design, stamp out and possibly even custom paint trim pieces, decorative corners, conduit or control boxes to beautify these new Silevo panel installations. Maybe it's something else, like the machines that make the machines optimization has to be going on also designing at the Riverbend factory...or perhaps he wants to use an engineering team or software design resources on SolarCity products? I can see the operational frustration when trying to allocate resources. I found it most useful to think about from the product oriented or finance perspectives and think like a guy who owns all the tools but can't use them together seamlessly and why it makes perfect sense to Elon from his birds nest.
http://www.nytimes.com/2016/06/24/b...energy-logic-of-a-tesla-solarcity-merger.html
http://www.nytimes.com/2016/06/24/b...energy-logic-of-a-tesla-solarcity-merger.html
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TheTalkingMule
Distributed Energy Enthusiast
A SCTY option to buy 100 shares with a strike price of $80 would convert to a TSLA1 options to buy 12.2 (or 13.1) shares of TSLA for $655 (or $610) per share. Do you think that'll be worthless?
Obviously the question was meant as part of a wager the merger does not go through.
doggusfluffy
Closed
Again, wellinghoff is a former FERC chairman now working for solatcity. The current incumbent utiltiy regulatory framework is the biggest obstacle to accelerated growth for Solarcity and now they have one of the most respected individuals within that framework on Solarcity's side changing it.
Canuck
Well-Known Member
Not true.
If a majority shareholder of a public company refuses to sell, for any reason, such as keeping it in the family, for sentimental reasons, because they don't like the potential purchaser, etc., etc. (all of which happen) how do you force a sale? Majority shareholders can't be forced to sell shares in publicly traded companies, as you seem to think. Of course, Corporation Acts in most jurisdictions have oppression remedies for minority shareholders but there's no guarantee the Court will conclude that decisions not to sell by the majority are oppressive to minority shareholders.
Also, although a fairly rare occurrence, large investors (such as hedge funds and mutual funds) that are against a buyout have been known to actively reach out to enough investors to gain control of more than 50% of the company's voting stock and thwart a sale, in which case, the subject company is also not for sale.
I'm Using that " logic", nothing is for sale.
I can go into a store to buy the doggy in the window, but the store owner decides he doesn't want to sell it to me. So the dog was never for sale.
Or I could want to buy a model X and the Ceo decides he doesn't want to sell it to me, so that means the model X is not for sale.
besides, no one said anything about forcing a majority person to sell, the point of the acquisition is to offer a substantial premium to get them to want to sell.
gigglehertz
Member
So we closed just above max pain, then fell down just below after hours. Does after hours stock price on Friday affect whether or not an option is in the money?
I think tftf could explain this to you real clear
Hey all,
Quick question. How does the conversion of SCTY stock to TSLA work. Tesla announced that the offer was to convert at 0.122x - 0.131x of Tesla shares. Is this dependent on the fluctuation of TSLA stock price or is that locked in presuming Solar city accepts that bid?
Does that mean that at $22/share coverts into TSLA stock at $181? (assuming 0.122x)
Is that right? Help me out here. (I'm a beginner)
Quick question. How does the conversion of SCTY stock to TSLA work. Tesla announced that the offer was to convert at 0.122x - 0.131x of Tesla shares. Is this dependent on the fluctuation of TSLA stock price or is that locked in presuming Solar city accepts that bid?
Does that mean that at $22/share coverts into TSLA stock at $181? (assuming 0.122x)
Is that right? Help me out here. (I'm a beginner)
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