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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: 3, Insightful) by Anonymous Coward on Wednesday June 22 2016, @03:23PM
Tesla, fine provider of batteries and battery accessories.
Actually, when you put it in this context, it makes more sense. This is exactly the business model that Honda uses. They develop engines well, and they make all sorts of products that make use of their core strength: Automobiles, Motorcycles and Scooters, Airplanes, Boat Outboard motors, Lawnmowers and Snowblowers, Electrical Generators and more. Seems to be working for Honda. Maybe it makes even more sense that Tesla follow the same model in markets with fewer competitors than Honda has to face in all of their markets.
(Score: 3, Insightful) by VLM on Wednesday June 22 2016, @03:43PM
I'd agree with and extend your remarks with the example of General Electric. One decade they're making electric motors and alternators, next thing you know they're making home appliances with motors in them, then somehow they start squirting out MRI machines (not entirely sure how that happened).
Another example of vertical integration would be good ole Standard Oil.
As a tech analogy I'd propose Microsoft. Superficially spreadsheets, video game consoles, and mice do not seem to have anything in common to an end user, but there are similarities in the core technologies of those products. MS is an example of the arrow of time in business where nobody would believe the story if run in reverse; if a startup today said their stated goal was to sell wineglasses, pesticides, and gray market non-FCC or UL listed cellphone chargers, everyone would WTF although its not unlikely if one of today's startups lives long enough it could end up selling that stuff. Actually I think I just described amazon.com. Whatever.