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Investors and finanical analysts have been baffled by a $2.86 billion bid by electric car manufacturer Tesla to acquire SolarCity:
Musk, the largest shareholder of both companies, said he and Antonio Gracias, who is also a member of both boards, will recuse themselves from voting on the takeover offer. The all-stock deal is worth $26.50 to $28.50 for each SolarCity share, Tesla said. That calculates to a premium of as much as 35 percent from Tuesday's closing price. The average 12-month price target among analysts surveyed by Bloomberg is $29.82. "In my personal opinion, this is obviously something that should happen," Musk, who is chief executive officer of Tesla and chairman of SolarCity, said in a conference call. "It's a no-brainer." With 100.2 million SolarCity shares outstanding, the offer is worth as much as $2.86 billion.
[...] Tesla fell as much as 12 percent in extended trading while SolarCity rose as much as 29 percent.
(Score: 4, Interesting) by VLM on Wednesday June 22 2016, @03:21PM
My semi serious answer is instead of paying $100K for a roadster and plugging it into a coal power plant, they'll sell package deals of a garage worth of solar cells and some batteries along with the roadster for $150K. I mean you already got them in the showroom, they're already gonna have to hire an electrician to put in the wiring for a fast charger, why not have the guy rough in the solar panels? If you thought your car dealer was a PITA over $800 rustproofing underbody treatments or $400 worth of floor mats at closing time, wait till he tries to slip in a $50K solar panel system at closing.
Also that makes it sticky. So you "need" to socially signal your holiness by being a good acolyte of environmentalism, and here's your highly visible solar panels (and your sexy sports car). But when the car isn't cool anymore or its time for a new one, instead of getting a Porsche this time, well you go these solar panels and those give you twitter and FB street cred so you can't let them go to waste, so I guess you kinda gotta buy sexy electric sports car 2.0, probably from Tesla. You're not buying a sexy sports car for two years, you're buying 25 years of solar panels that kinda sorta need a companion sexy sports car in the garage, conveniently made by Tesla. Like ipod vs itunes and once your itunes account has enough money blown into it, you want to keep using ITMS. I guess I threw out about $200 when I eventually went full android.
The real answer as always is in the financial reports. I have not analyzed them myself but I've read they're both having cash flow sheet problems but are otherwise quite healthy. Musk seems pretty good at running companies into cash flow issues. Whatever plan he's got to fix cash flow issues apparently scales really well with size because he'd prefer running it once on one big company not twice on two smaller companies. Stereotypically I'd say most mergers happen because someone with a sick balance sheet thinks merging with a sick income statement will fix them both or whatever, its usually asymmetric. Its all very alchemical like brewing a magic potion. Also modern management is only about as effective as alchemy or astrology in practice. So its unusual but not unheard of for two companies both with similar problems to merge. Noteworthy and unusual but not unheard of. Anyway I look forward to seeing what his plan is.
(Score: 2) by bob_super on Wednesday June 22 2016, @04:13PM
I'll add that people leasing from SolarCity will likely be told regularly how well the new Tesla matches their system, or how it could be expanded to fit a bigger one.
Also, using your Tesla as a Powerwall can make sense, based on your driving habits (a convenient app to know you need the full charge on mistress-Wednesday only). And that's easier done if it's the same company.
(Score: 4, Insightful) by Anonymous Coward on Wednesday June 22 2016, @05:03PM
Please drop such tripe as "So you "need" to socially signal your holiness by being a good acolyte of environmentalism". Every area in life has its annoying people, religious evangelists, politic-heads, gun enthusiasts, etc. Obviously you've been annoyed by the environmental trend, but it really is a factual necessity. I would argue that supporting environmentalism in general is being a sensible human being concerned with future survival.
Are there ridiculous examples of environmentalism being stupid? Sure. Should you go mocking a large section of humanity because you have some gripes? No. That is the path of prejudice, where you slide people into your own mental categories to reinforce your worldview.
(Score: 0) by Anonymous Coward on Thursday June 23 2016, @03:32AM
The best part about VLM's post complaining about people needing to signal attitudes that he disagrees with is that he's signaling how great he thinks he is by whining about them. He is literally exactly what he is complaining about. Too fucking clever for his own good.
(Score: 2) by frojack on Wednesday June 22 2016, @05:29PM
But look, they are moving in the opposite direction. Towards a 35-thousand-ish priced car.
The market for people wanting to spend 100k on a car is very small. The market for people buying a 35K car and tossing in another 10 or 20K for home charging all under the same car/home loan.
No, you are mistaken. I've always had this sig.
(Score: 2) by VLM on Wednesday June 22 2016, @09:44PM
That is insightful, think about some random dude buying a generic sedan that happens to be electric.
Now the electrician has to come out and install a fast charger station and thats costing some serious bucks, too much to roll into the car and hope the bank doesn't notice and too small to pay the enormous fees and paperwork of a home equity loan.
But... what if they're like, so dude, why pay $2K for a charger and electrican and buried lines to the garage if you can take out a loan for $10K and cut, not raise, your electric bill using solar panels all while installing the charger you need anyway? I could see that package deal selling pretty well. The bank that gives the loan for the car is chill, the bank that loans the panels is chill...
(Score: 2) by Gravis on Wednesday June 22 2016, @08:51PM
Tesla sells directly to the consumer, so there is no car dealer bullshit. Frankly, I hope Tesla puts car dealers out of business. ;)