SolarCity (SCTY)

[durkie]

Looks like you're right. From http://www.optionseducation.org/tools/faq/splits_mergers_spinoffs_bankruptcies.html:

I own a September call option for company XYZ. News has come out stating that XYZ is the subject of a cash buyout closing in May. If the merger is approved, what will happen to the call option I own?

When an underlying security is converted into a right to receive a fixed amount of cash, options on that security will generally be adjusted to require the delivery upon exercise of a fixed amount of cash. Additionally, trading in the options will cease when the merger becomes effective. As a result, all options on that security that are not in-the-money become worthless and all that are in-the-money have no time value.

I guess the thing everyone is holding their breath on here is what the SCTY buy-out price will be. Even then, I'm wondering if it's prudent to take what I can get for my Jan 17 $45 calls...

 

[Lessmog]

Originally Posted by TheTalkingMule
Seeking FUD has now picked up the "story". LOL

When is human intellect gonna adjust to the Information Age?

Dunno, I'm still throwing stones at the communal tree.

Wild guess: Is that a good joke in reference to this:

Elon Musk ‏@elonmusk 1 dför 1 dagar sedan Elon Musk Retweetade Ars Technica
Evolution hasn't advanced much

Elon Musk lade till
Ars Technica @arstechnica Ritualized behavior? Chimps all throw rocks at the same tree Ritualized behavior? Chimps all throw rocks at the same tree | Ars Technica … by @cathleenogrady





495 retweets 1 217 gillanden

 

[Foghat]

I would give more credence to the rumor of musk/Solarcity aquiring sunrun/and or vivint at these prices....

Another rumor, what at about an enphase acquisition? Doubled up, Jumped up from $80mln market cap in recent days(30% today), might this be a tesla/Solarcity target?

lots of questions, could be slot of things going on right now...

 

[TheTalkingMule]

I would be willing to bet that this Chipotle E. coli outbreak was a coordinated stock swindle. Is the SEC looking into that?

 

[jhm]

Wild guess: Is that a good joke in reference to this:

You got me.

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I would give more credence to the rumor of musk/Solarcity aquiring sunrun/and or vivint at these prices....

Another rumor, what at about an enphase acquisition? Doubled up, Jumped up from $80mln market cap in recent days(30% today), might this be a tesla/Solarcity target?

lots of questions, could be slot of things going on right now...

Yeah, I'm not buying this rumor. I think it makes more sense for Musk just to keep buying shares when they are super low.

I do think that the rumor did startle shorts, but they'll be back.

 

[Jack6591]

I'm not buying the rumor. It might be something that has yet to come to light.

 

[jhm]

SolarCity (SCTY) Stock Climbs as Smart Money Gets Interested - Modest Money

Hey, we got your smart money right here.

 

[Jack6591]

State of New York TV Commercial

Watching the Republican presidential debate tonight, the state of New York ran a commercial touting their business environment, showcasing SolarCity's gigafactory.

Great commercial. Just saying.

 

[TheTalkingMule]

Yeah, I'm not buying this rumor. I think it makes more sense for Musk just to keep buying shares when they are super low.

I do think that the rumor did startle shorts, but they'll be back.

I think Musk is anxious to move on to SpaceX full time. He wants to get the Model 3 up and running then step it down a good bit, then exit. The last thing he wants to deal with is taking on a finance job for 12-18 months.

 

[The Blue Owl]

I think Musk is anxious to move on to SpaceX full time. He wants to get the Model 3 up and running then step it down a good bit, then exit. The last thing he wants to deal with is taking on a finance job for 12-18 months.

Another thing is, to come up with the money he would need to use his stakes in Tesla and SpaceX as collateral. So by assuming to take all risk on Solar City, he would also put at risk the mission of SpaceX and Tesla. He is one of the biggest risk takers out there, but only if the purpose is to survive when his back is against the wall. I don't see him doing it for an opportunity to increase his stash.

Unless he does it by bringing in other investors, in a way that allows him to maintain ultimate control without jeopardizing his other two companies.

 

[Jack6591]

Another thing is, to come up with the money he would need to use his stakes in Tesla and SpaceX as collateral. So by assuming to take all risk on Solar City, he would also put at risk the mission of SpaceX and Tesla. He is one of the biggest risk takers out there, but only if the purpose is to survive when his back is against the wall. I don't see him doing it for an opportunity to increase his stash.

Unless he does it by bringing in other investors, in a way that allows him to maintain ultimate control without jeopardizing his other two companies.

"Optimism? Pessimism? _____ that. We're going to make it happen. As God as my bloody witness, I'm hell-bent on making it work." - Elon Musk

SolarCity is part of the master plan.

 

[blakegallagher]

Another thing is, to come up with the money he would need to use his stakes in Tesla and SpaceX as collateral. So by assuming to take all risk on Solar City, he would also put at risk the mission of SpaceX and Tesla. He is one of the biggest risk takers out there, but only if the purpose is to survive when his back is against the wall. I don't see him doing it for an opportunity to increase his stash.

Unless he does it by bringing in other investors, in a way that allows him to maintain ultimate control without jeopardizing his other two companies.

My guess is he does not see very much risk in taking it private because he sees the value in solar city. The sale of everdream (the last lyndon start up) provided the capital needed for elon to keep tesla afloat. I imagine by the time space x needs funds that can't be raised elsewhere Elons stake in scty will be worth more than his current stake in tesla.

 

[Newb]

Question to you guys, what would happen to TSLA if TM was to acquire SolarCity? Given the potential synergies, and given that Tesla is a much more powerful brand, that might certainly help Solarcity's business (also for an expansion internationally). Quite a number of people around the globe would love to have a Tesla rooftop combined with Powerwall and Model 3, I'd reckon. But only few people know Solarcity over here in Europe.

 

[jhm]

My guess is he does not see very much risk in taking it private because he sees the value in solar city. The sale of everdream (the last lyndon start up) provided the capital needed for elon to keep tesla afloat. I imagine by the time space x needs funds that can't be raised elsewhere Elons stake in scty will be worth more than his current stake in tesla.

The biggest risk in owning SolarCity as a shareholder is the market risk of the stock. The value of the stock gets pushed around with waves of sentiment and macro economic even while the business continues to make steady progress. Additionally, shorts borrow shares and expand the gross shares long diluting the value of each long position. So gross shares long is the sum of the float and shares short. Additionally, bond investors take their cue from the share price intensifying stock price risk on the ability of the firm to get debt financing. In private ownership these layers of stock price market risk is peeled away, and the private owner is left with a risk profile more concentrated on execution risk, competion and macroeconomics.

This is not to say that I think Musk should take SolarCity. In fact, I do not believe he should. I am simply trying to highlight some of the reasons why it can be attreactive. And Musk knows these issues well. He is very deliberate about not taking SpaceX public. He knows that if SpaceX were public. He knows that that bringing on shareholders to SpaceX would greatly complicate execution on his strategic vision and subject the value of SpaceX to all the whims and passions of the stock market.

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Question to you guys, what would happen to TSLA if TM was to acquire SolarCity? Given the potential synergies, and given that Tesla is a much more powerful brand, that might certainly help Solarcity's business (also for an expansion internationally). Quite a number of people around the globe would love to have a Tesla rooftop combined with Powerwall and Model 3, I'd reckon. But only few people know Solarcity over here in Europe.

I think bears would have a field day with this. They'd be able to point to all the complexities in SolarCity to cast doubt on the entire enterprise. If would be much harder for the market to value the combined company. On an executional level I'd love to see it, but as a stock it would be much harder to get a fair valuation.

 

[Bunky]

Pretty severe spike just now. Wonder what the algo's are picking up.

 

[Newb]

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I think bears would have a field day with this. They'd be able to point to all the complexities in SolarCity to cast doubt on the entire enterprise. If would be much harder for the market to value the combined company. On an executional level I'd love to see it, but as a stock it would be much harder to get a fair valuation.

Thank you, James. So, short-term negative for TSLA (in that described scenario Tesla aquiring SolarCity) and mid to long term possibly very positive, I'd think?

And what's the likelihood of such a move? For some reason my gut's saying this is more likely than SolarCity going private but that's the gut of a newbie. ;-)

 

[The Blue Owl]

The biggest risk in owning SolarCity as a shareholder is the market risk of the stock. The value of the stock gets pushed around with waves of sentiment and macro economic even while the business continues to make steady progress.

I agree, I'm not saying that the risk is necessarily very high, but it's not theoretical either. I'm thinking primarily about the regulatory risk, especially if we get a Republican president and Congress. Macro risk is also non-negligible; it can have a big impact on their future funding.

 

[JeffnReno]

Just bought 36 shares. I'm in...plus I have them on my roof.

 

[blakegallagher]

Just bought 36 shares. I'm in...plus I have them on my roof.

Awesome! Glad to have you on the smart side of the investment and very cool you have them on your roof

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http://www.streetinsider.com/dr/news.php?id=11387663

Adding to the rumor solar city declines to comment on rumor of buyout

 

[Newb]

Mod note: offending post removed to snippiness

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