Tesla makes offer to acquire Solar City

[Tam]

Remember to set your calendar to Jun 22, 2016 7:30 AM ET for the call:


Tesla Motors Conference Call | Tesla Motors

 

[Alketi]

Remember to set your calendar to Jun 22, 2016 7:30 AM ET for the call:

I'm guessing Elon is in N.Y.? Or, he gets up at 4:30AM PST and really doesn't sleep.

 

[Tam]

I'm guessing Elon is in N.Y.? Or, he gets up at 4:30AM PST and really doesn't sleep.

It's a phone conference so he does not have to travel to NY. He can talk from California at 4:30 AM PDT. He might as well since his sleeping bag's at the assembly line.

 

[Tam]

Some have pointed out the different cultures of sales between Tesla and Solar City.

With Tesla, sales people are quite well behaved and not pushy and owners are quite pleased with the buying experience.

With Solar City, sales people are quite aggressive who wouldn't take a no for an answer. Some prospective customers complain about numerous sales calls and rate the experience as just the same as traditional car dealership or worse.

So, is it still true that Tesla Sales people don't get a commission?

I assume that Solar City sales people do get a commission in order to justify their tenacity?

Could this be a perfect marriage? You hardly gets any phone call from car department but you might get lots of knocks on the door or constant phone call from the same Tesla company but this time, from Solar department?

 

[Gilzo]

Some have pointed out the different cultures of sales between Tesla and Solar City.

With Tesla, sales people are quite well behaved and not pushy and owners are quite pleased with the buying experience.

With Solar City, sales people are quite aggressive who wouldn't take a no for an answer. Some prospective customers complain about numerous sales calls and rate the experience as just the same as traditional car dealership or worse.

So, is it still true that Tesla Sales people don't get a commission?

I assume that Solar City sales people do get a commission in order to justify their tenacity?

Could this be a perfect marriage? You hardly gets any phone call from car department but you might get lots of knocks on the door or constant phone call from the same Tesla company but this time, from Solar department?

Meh...personally that's the least of my concern, if a concern at all. My biggest is will this interfere with the model 3 ramp up? As things stood, this ramp up needs to be almost flawless to pull off the goals Elon has laid out. With so many moving parts to plan, organize and execute the ramp, I'm not too sure the timing is right.

Saying that, I'm all for the deal and think it's a good move for the long term. Brilliant move in some aspects when you think about the Tesla stores and how this move can solidify Tesla being able to open more stores and keep existing stores...especially in the states they're fighting with the dealerships. Can't make an argument to close down or deny a tesla store if they're selling storage and solar....which can eventually lead cars later.

 

[Tam]

...will this interfere with the model 3 ramp up...

Workload wise, I don't think it interferes with Model ≡ ramp up. Solar City already has a CEO and the company has been able to run by itself.

It's just like Warren Buffet buying See's Candy that already cranked out sweets all by itself before his arrival.

However, financially, both Tesla and Solar City are not turning a profit yet.

That is fine just like Amazon that did not turn profits for years and still didn't die.

The trick to stay alive when you don't produce a profit is cash.

You need cash to pay your workers and other expenses.

As long as you got a cash infusion, you are fine.

As soon as you are cash-strapped, you might find yourself in the same situation as SunEdison that just went bankrupt 2 months ago.

 

[gavine]

Switching gears away from the financial discussions....maybe this deal will accelerate the installation of solar at SuperChargers. I think that's an important thing that will make a statement.

Also, maybe the SolarCity cars driving around will be Model 3's? I'm always disappointed when I see a fossil-burning SolarCity vehicle. It sends the wrong message.

 

[WarpedOne]

Remember to set your calendar to Jun 22, 2016 7:30 AM ET for the call:
Tesla Motors Conference Call | Tesla Motors

I cannot listen in live... will there be 'live transcript'?

 

[tsla007]

Well, is this a complete surprise? No.
In fact, I thought it would happen sooner.
Is it a smart move financially-Not right now.
Will it be a smart move in the end-YES!

Now, what if they put hyperloop into the mix and go public and merge it with Tesla?! I'll bet they raise 10b or more for hyperloop-much safer than flying and faster.
Add that to the approximate profits of model 3-4b.
Absorbing solar city will not be painful in the end, but right now it is a strain financially.

As a past shareholder who sold it all just about a month ago.
Will I buy it back? I might but not the 30k plus shrs I had before.
I might put 5k shrs order in but in a little while. I want the dust to settle on this first.

Investing aside-I'm curious to know what others think about this merger or should I say potential merger but 95% certainty that it will happen.

 

[Tam]

Operator came on announcing "stand by."

 

[Tam]

I cannot listen in live... will there be 'live transcript'?

It will be summarized by SamO at:

Tesla Motors / SolarCity Conference Call June 22, 2016 | Tesla Motors

 

[Tam]

Operator: Welcome.

 

[Tam]

Jeff Everson: introduction.

 

[Tam]

Todd: it's an offer, not agreement. Elon 5% stock holder.
More transparent process. Up front. Business rationale for deal

 

[Tam]

Elon: 3 parts in last year presentation

 

[Tam]

Energy, Transportation, and solar.

Vertical integration.

Doubling sale at that time (Model 3 sales and Solar)

Obvious thing to do

 

[JenniferQ]

He may be a genius, but he's so hard to listen to!

 

[Tam]

Elon: execution is cleaner. No brainer.

 

[Tam]

He may be a genius, but he's so hard to listen to!

Did he sleep yet?

 

[Tam]

Elon: Increase debt postion?

Cashflow generated positive next 3 to 6 months.

Net cash generator.