No, just hitching the wagon to an anchor. We are surely irritating the SCTY fans but I never really cared for that company. I mean we all assumed they were sufficiently cozy. This delivers very little benefit to TM.. They can sell solar in stores? They could have just partnered at any time.
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No, just hitching the wagon to an anchor. We are surely irritating the SCTY fans but I never really cared for that company. I mean we all assumed they were sufficiently cozy. This delivers very little benefit to TM.. They can sell solar in stores? They could have just partnered at any time.
It looks like it's a straight stock swap, meaning Tesla does not give any cash to SCTY. For the shares that TSLA gives to SCTY shareholders, that comes from TSLA creating new shares... thus dilution to current TSLA shareholders.
I'm almost certain this won't get shareholder approval. Or someone else bids on it.
But how can this not be a viewed as a way for Elon Musk to bailout Elon Musk.
But how can this not be a viewed as a way for Elon Musk to bailout Elon Musk.
Makes sense to me in a lot of ways.
edit to expand on why I like the deal: Turns Tesla more into a complete solution, brings SCTY financing into TSLA which will help TSLA with car sales as well, lets TSLA sell a "whole solution" under one roof, merges customer lists of two companies which have crossover appeal, SCTY's share price is currently low so it's more of a deal than in the past when it has been inflated...I really don't understand what people don't like about it.
And the market's reaction, well, it's just objectively stupid, based on simple math. If SCTY is valued at 2.1b right now, and TSLA is buying it for 2.5b, sinking TSLA's mkt cap by 3.5b (which is where we currently are) suggests that the market actually thinks SCTY is worth -1b to TSLA. That doesn't make any sense. I could see TSLA's mkt cap going down by 400m based on the premium which is being paid for SCTY, but 3.5b? Nobody's doing the math on this one.
edit to expand on why I like the deal: Turns Tesla more into a complete solution, brings SCTY financing into TSLA which will help TSLA with car sales as well, lets TSLA sell a "whole solution" under one roof, merges customer lists of two companies which have crossover appeal, SCTY's share price is currently low so it's more of a deal than in the past when it has been inflated...I really don't understand what people don't like about it.
And the market's reaction, well, it's just objectively stupid, based on simple math. If SCTY is valued at 2.1b right now, and TSLA is buying it for 2.5b, sinking TSLA's mkt cap by 3.5b (which is where we currently are) suggests that the market actually thinks SCTY is worth -1b to TSLA. That doesn't make any sense. I could see TSLA's mkt cap going down by 400m based on the premium which is being paid for SCTY, but 3.5b? Nobody's doing the math on this one.
If that's the case, that's probably why TSLA has bounced back up from the low/mid $190s heading up towards $200.
Ulmo
Active Member
Ooh wow.
1. Short term stock price of TSLA dives! Because: SCTY is on God's Mission, not so much on Moneyman's Mission, from the near sighted.
2. Long term outlook:
I believe Tesla Energy has to integrate into grid enabled products, whether or not they are actually grid-tied. That is to say, they need to be able to be grid-tied. Grid-tied is a standard, so that's the standard Tesla Energy needs to work to, for all of their off, on, and quasi-grid products, and make them all interchangeable in that realm.
To this end, Tesla Energy needs to have a good relationship with inverter manufacturers, Grid providers, and Solar providers. Why Solar providers? Because Solar installers are the ones driving Solar providers, and Solar installers are the ones driving inverter integration with the Grids.
When this happens, Tesla Energy will be in a better market position. Right now, with Tesla Energy out of the loop on the whole Inverter process, I fear that Tesla Energy will be a mouse as compared to the cats of entrenched interests.
If Tesla Energy now has SCTY under one roof with it, the inverters will dance to the tune of Solar + Battery. Having the inverters be outside companies still requires them to be compatible with competing battery providers and competing solar providers, but at the same time, will be able to integrate with Tesla Energy, no matter what.
If Tesla Energy can't get a foothold into the Solar Installer market, then they can be flat-footed, dealing only with botique large installs, which while not nothing, is hindering their consumer Tesla Energy business. Having SCTY in its back pocket will always mean Tesla Energy has a marketplace in consumer installs, as well as large installs, which will help them become real grid competitors.
Also, the question is always there during the transition away from Diablo Canyon, Nuclear Power, Oil and Coal to Electric: How do we power these Tesla cars? With, of course, our solar panels, wind farms, and batteries. It's simple math. (Although there are many people simpler than the math, the math is pretty simple.)
The downsides are that:
a. Customers who want a Tesla car, solar panels, and batteries, will be putting out a lot of money, and will want to squeeze their money, causing slimmer margins for Tesla.
b. Solar City already had a business model. What more could Tesla bring to that other than administrative differences? I don't see a lot of administrative differences.
c. Any types of problems having to do with Solar City business would impact a car company, and vice versa.
d. One party isn't causing a sink for the others' debt; both are heavily debt-laden.
The wild cards:
Buying opportunities for the stock, for possible future upturns and downturns.
Hmm. If I had noticed TSLA was at 232 a few weeks ago, should I have reduced my position? Obviously, this is a buying opportunity right now that few could have anticipated.
1. Short term stock price of TSLA dives! Because: SCTY is on God's Mission, not so much on Moneyman's Mission, from the near sighted.
2. Long term outlook:
I believe Tesla Energy has to integrate into grid enabled products, whether or not they are actually grid-tied. That is to say, they need to be able to be grid-tied. Grid-tied is a standard, so that's the standard Tesla Energy needs to work to, for all of their off, on, and quasi-grid products, and make them all interchangeable in that realm.
To this end, Tesla Energy needs to have a good relationship with inverter manufacturers, Grid providers, and Solar providers. Why Solar providers? Because Solar installers are the ones driving Solar providers, and Solar installers are the ones driving inverter integration with the Grids.
When this happens, Tesla Energy will be in a better market position. Right now, with Tesla Energy out of the loop on the whole Inverter process, I fear that Tesla Energy will be a mouse as compared to the cats of entrenched interests.
If Tesla Energy now has SCTY under one roof with it, the inverters will dance to the tune of Solar + Battery. Having the inverters be outside companies still requires them to be compatible with competing battery providers and competing solar providers, but at the same time, will be able to integrate with Tesla Energy, no matter what.
If Tesla Energy can't get a foothold into the Solar Installer market, then they can be flat-footed, dealing only with botique large installs, which while not nothing, is hindering their consumer Tesla Energy business. Having SCTY in its back pocket will always mean Tesla Energy has a marketplace in consumer installs, as well as large installs, which will help them become real grid competitors.
Also, the question is always there during the transition away from Diablo Canyon, Nuclear Power, Oil and Coal to Electric: How do we power these Tesla cars? With, of course, our solar panels, wind farms, and batteries. It's simple math. (Although there are many people simpler than the math, the math is pretty simple.)
The downsides are that:
a. Customers who want a Tesla car, solar panels, and batteries, will be putting out a lot of money, and will want to squeeze their money, causing slimmer margins for Tesla.
b. Solar City already had a business model. What more could Tesla bring to that other than administrative differences? I don't see a lot of administrative differences.
c. Any types of problems having to do with Solar City business would impact a car company, and vice versa.
d. One party isn't causing a sink for the others' debt; both are heavily debt-laden.
The wild cards:
Buying opportunities for the stock, for possible future upturns and downturns.
Hmm. If I had noticed TSLA was at 232 a few weeks ago, should I have reduced my position? Obviously, this is a buying opportunity right now that few could have anticipated.
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Folks this is not a 10 minute dip. This will settle out in 1-2 weeks. If, as many suspect, Q2 numbers are good that will put a cap on this but I wouldn't expect this to be a flash crash.
*grumble*.. solar is so cheap. That is why all the supercharger stations have solar canopies over them...
*grumble*.. solar is so cheap. That is why all the supercharger stations have solar canopies over them...
i.e. good time to buy when the math gets sorted and correction hits. This is a major overreaction
hockeythug
Active Member
I am so mad right now. As a shareholder, I want to vote against this if given the opportunity. The blog post hardly provided enough support to justify this action. I am now thinking of liquidating my core TSLA stock position.
For those who say this is "Elon bailing out Elon," note that he recused himself from the decision on both boards, and they are doing a vote of "majority of disinterested shares" which I presume means his shares will not be voting on this (anyone feel free to correct me on that though)
And can some of you angry people please describe why you're angry instead of just saying you're angry? I really have no idea why someone would be angry about this.
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