SolarCity (SCTY)

[TheTalkingMule]

I guess I'm just a total socialist when it comes to power. To me, the whole point of a load balancing battery is to serve as a benefit to the grid (to offset the negative of intermittent generation). If the utility thinks it will serve them better for them to control the way in which it balances, I don't have a problem with that. The benefit to me as a customer is less opposition to renewable power and potentially lower prices to everyone for grid power as the utility will have fewer problems with demand peaks and valleys.

Everything he said was absolutely true, however he needs to be more aware of how he represents this new energy dynamic. Having a battery in your basement and selling juice to the grid via SCTY is a wonderful thing, but it's not being portrayed in a way that's palatable to the average consumer(let alone appealing). Lyndon talks as if he's making a case in front of a utility commission, even when there are cameras rolling and he's talking to reporters. That's not good when we're looking for consumer sentiment to drive policy and tech adoption.

At the 57:30 mark that I noted above he tries to articulate the benefits of a distributed model for smoothing, but it comes out as "You gotta give control of that storage to the grid, you gotta have the utility be able to use that so they can load balance everything..." That is not a consumer-centric portrayal of the new energy dynamic we advocate, it's closer to a sound-bite for a Heritage Foundation attack ad. So the very thing that will set consumers free can be portrayed as shackles if you're not crafting and articulating your message properly.

 

[TheTalkingMule]

ER should have a positive effect, right?

One man who knows very little about the SCTY model just moved the stock downward 30%, so I don't think the results of the historically uninspiring 1st quarter will be able to move the needle much. The inputs into the algorithms need to be rosier before attacks like this bounce off the stock and allow it to move higher.

Here's a chart from the Bloomberg Chanos article. This is the data that's in every algorithm right now, that either needs to drift in the other direction or(most importantly) sentiment needs to wake up and realize the value of the SCTY model. If a few comments from Chanos have this much effect, the average analyst is unlikely to finally gain clarity on May 10th. That being said my predictions for price movement have been wrong pretty much every quarter, maybe that's a good sign.

 

[Noble Ninja]

This is getting ridiculous.

Down 10% per day over three days, about 30% down since Monday's close and still no circuit breaker kicking in? Also, no specific bad news recently, just some overall market decline and this Chanos BS this week. Effectively, any actual bad news for this ER is already well priced in.

 

[Lessmog]

So, has SEC also been privatized? (By whom?)

 

[kenliles]

So, has SEC also been privatized? (By whom?)

Trumped, pumped, and dumped

 

[Lessmog]

Makes sense - but already?
Did you all see that clip of Ted Cruz turning his wife's other cheek? It was tweeted by the New York Daily News: https://t.co/m3zu9k5j5J

 

[TheTalkingMule]

Chanos knows what he's doing, if he can get some downward action the algos will do the rest for him as the stock ticks below certain levels. It's absurd the amount of money he made this week on a self-fulfilling set of disinformation, but that's just part of market dynamics.

Waiting for the 2018 calls to get cheap.....

 

[kenliles]

Makes sense - but already?
Did you all see that clip of Ted Cruz turning his wife's other cheek? It was tweeted by the New York Daily News: https://t.co/m3zu9k5j5J

Saw that yeah
His kids knew what was coming and how to deflect apparently - experience

 

[renim]

FWIW

a brief note on one of my favorite financial types, Philip Falcone, in the 90's he helped kick start the Iron Ore powerhouse known as FMG.

anyway he had some colourful interaction with the SEC after winning a short squeeze against Goldman Sachs
SEC hits real short squeeze | OtcShortReport Blog
SEC.gov | Philip Falcone and Harbinger Capital Agree to Settlement

something different seems to have with SCTY recently, the interest rate that the Financial companies charged for shorting shares skyrocked, but the interest paid by Financial companies for those same shares did not skyrocket, effectively it seems that the Financial companies this time simply made off like bandits, and weaker shorts transferred their wealth to the stronger shorts. The Longs were mostly on the sidelines for all of this activity (some got a nice 'dividend' but nothing like what they deserved).

 

[renim]

correction - Philip Falcone, in the 00's he helped kick start the Iron Ore powerhouse known as FMG.

 

[drinkerofkoolaid]

Did analysts and investors forget the only reason SolarCity lowered guidance last quarter was to provide conservative guidance, due to the uncertainty about if the ITC would get renewed? SolarCity emphasized that if the ITC was extended, the guidance would end up being far too conservative.

Although completely unscientific, I've seen 5 SolarCity vehicles in the past week, on the East Coast. I'll take this as a good sign.

 

[TheTalkingMule]

Did analysts and investors forget the only reason SolarCity lowered guidance last quarter was due to the uncertainty about if the ITC would get renewed?

I don't think that is or will be a major concern, it should be easy to crush their projected +18% yoy 1Q install guidance. I would hope so anyway.

The bigger concerns are cash flow, trajectory of costs and ease/cost of finance. It's gonna be interesting for sure, this should be the last wild quarterly call then it's onward and upward.

 

[drinkerofkoolaid]

I don't think that is or will be a major concern, it should be easy to crush their projected +18% yoy 1Q install guidance. I would hope so anyway.

The bigger concerns are cash flow, trajectory of costs and ease/cost of finance. It's gonna be interesting for sure, this should be the last wild quarterly call then it's onward and upward.

SolarCity was very clear that if the ITC was extended, installations in 2016 would be significantly higher than the revised guidance.

Additionally, this has been completely missed by the media. This partnership will significantly reduce customer acquisition costs.

RESAAS Services Inc. (via Public) / SolarCity Joins the RESAAS Marketplace

For more info on RESAAS Services Inc.
http://m.marketwired.com/press-rele...eal-estate-professionals-cnsx-rss-1974693.htm

 

[TheTalkingMule]

SolarCity was very clear that if the ITC was extended, installations in 2016 would be significantly higher than the revised guidance.

I believe overall 2016 guidance was maintained at 1.25GW installed, but 1Q was revised down to something tiny due to the impact of ITC uncertainty. Did the math when it was announced and I think it penciled out to an 18% increase over installs from 1Q last year.

So in effect....overall guidance was maintained, but pushed back later in the year.

 

[drinkerofkoolaid]

I believe overall 2016 guidance was maintained at 1.25GW installed, but 1Q was revised down to something tiny due to the impact of ITC uncertainty. Did the math when it was announced and I think it penciled out to an 18% increase over installs from 1Q last year.

So in effect....overall guidance was maintained, but pushed back later in the year.

Correct. However SolarCity emphasized that if the ITC was extended, SolarCity's guidance would almost certainly be far too low. I vaguely recall Lyndon laughing when asked about that, then saying something like they were preparing for the storm, to be full prepared for a scenario where the ITC wasn't extended.

 

[dandurston]

Nice to see green for the first time in a long while.

The announcement of utility scale solar seems like a positive:
SolarCity Launches Utility and Grid Services (NASDAQ:SCTY)

 

[gene]

All I can say is the stock price has a lot more room to go up, than down.

 

[drinkerofkoolaid]

What's the deal with the put to call ratio? There looks to be crazy high bias for puts. Thoughts?

There is an 8-10:1 premium for puts. And 100-300% IV. No wonder the stock is acting strange.

Even though I'm still not convinced he's short more than a handful of shares, Chanos is crazy if he doesn't cover today.

 

[TheTalkingMule]

I thought IVs main input is recent stock price volatility? In which case these high numbers are justified, no?

 

[drinkerofkoolaid]

Sort of. Yahoo published some article saying someone places a large bullish bet. I think the opposite is true and someone might simply be hedging since the June put:call ratio is very high.

Look at the price for $40 calls vs. $20 puts. $40 calls are .30 and $20 puts are $3. This only makes sense if the market is pricing in the probability of a $10 being equal to the probability of a $10 move down.

Or it could simply be that the 30% drop in one week caused by noise from Chanos has caused calls to be irregularly priced, making it possible for Chanos to buy calls and cover his short.