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Mon, Oct. 17, 2:03 PM
- Tesla (NASDAQ:TSLA) has “potential short-term upside” given upcoming product announcements that may “set up a ‘yes’ vote for the SolarCity (NASDAQ:SCTY) merger, Barclays analyst Brian Johnson writes in note.
- Upside may be followed by “downward drift as investors contemplate cash needs” of the combined company.
- Barclays still expects a fund raise this year despite Elon Musk's insistence to the contrary.
- Here's a table of TSLA's upcoming events
- TSLA -1.9% today as is SCTY.
Thu, Oct. 13, 6:58 PM
- Tesla's (NASDAQ:TSLA) impending merger with SolarCity (NASDAQ:SCTY), which goes up for a shareholder vote next month, will require raising ~$12.5B by the end of 2018, Oppenheimer analyst Colin Rusch says.
- TSLA will need to fund $5B-$8B in capex as it combines its stationary power business with SCTY, another $2B in capital for the auto unit, plus cash for working capital and operating lease obligations, Rusch maintains.
- Rusch is not keen on the merger plans, believing investors will be "concerned with visibility into the business" and that the way the merged company reports the performance of its varying units will be critical to convincing investors to stay aboard.
- Oppenheimer has a Neutral rating on TSLA, with lack of disclosure as one of the reasons, despite the company's potential to be a "transformative technology company" that could deliver "outsized returns for investors."
Wed, Oct. 12, 12:59 PM
- Tesla (TSLA +0.7%) and SolarCity (SCTY +1.9%) shareholders will vote on their proposed merger at a pair of special meetings on Nov. 17, according to a new SEC filing.
- The companies say each SCTY share will receive 0.11 TSLA share upon completion of the proposed merger, unchanged from previous SEC filings; on June 21, when TSLA's plans to purchase SCTY were announced, the notional value of a SCTY share, based on 0.11 TSLA share, was $24.16.
- TSLA also says it will provide strategic and product plans for a combined company ahead of the merger vote.
Tue, Sep. 13, 3:36 PM
- Jim Chanos slams Tesla's (TSLA -1.2%) proposed merger with SolarCity (SCTY -4.9%) as "crazy" and "the height of folly" while outlining his short positions in the stocks at CNBC's Delivering Alpha conference.
- Chanos calculates that the combined company would burn through $1B every quarter and "constantly need access to capital markets," and says he is baffled by TSLA's reluctance to give SCTY financing while the merger is pending.
- Chanos contrasts the Elon Musk approach with Amazon's Jeff Bezos, saying "This is the anti-Amazon. What made Amazon great... is that they didn't need capital."
Fri, Sep. 9, 2:23 PM
- Axiom Capital analyst Gordon Johnson reiterates his Sell rating and $7 price target on SolarCity (SCTY -3.3%), and believes Tesla (TSLA -0.8%) shareholders are "less inclined" to approve the merger of the two companies.
- According to Johnson, the joint form S-4 filed by the two companies suggests that TSLA “failed to consider whether another solar company was a “better fit" and that Evercore declared SCTY "the most attractive asset for Tesla in the solar energy industry" after no more than three weeks of due diligence.
- Johnson also believes TSLA is being shut out of the debt market and likely will need to tap the equity market with another $3B capital raise over the near-term.
Thu, Sep. 1, 2:23 AM
- The investment bank that advised SolarCity (NASDAQ:SCTY) on its $2.6B sale to Tesla (NASDAQ:TSLA) made a "computational error" in its analysis that discounted the value of the solar company by $400M, according to a new regulatory filing.
- Despite the mistake by Lazard, the companies agreed it would not change their view of the deal.
- SolarCity has until September 14 to actively seek other acquisition proposals, at which time its "go-shop period" ends.
- SEC Form S-4
Mon, Aug. 1, 7:16 AM
- SolarCity (NASDAQ:SCTY) formally agrees to be acquired by Tesla Motors (NASDAQ:TSLA) in a $2.6B all-stock deal.
- The terms of the transaction include a 45-day go-shopping period for SolarCity during which it can hunt for another offer.
- The companies expect to strike cost synergies of $150M in the first full year after closing and improve manufacturing efficiency over time.
- SEC Form 8-K
Mon, Aug. 1, 3:35 AM
- After a month of due diligence and negotiations, Tesla (NASDAQ:TSLA) and SolarCity (NASDAQ:SCTY) are likely to announce an all-stock merger today that was previously valued at about $2.8B, Reuters reports.
- The agreement is expected to include a go-shop provision, allowing SolarCity to solicit bids from other potential buyers before bringing the offer to a shareholders vote.
Sat, Jul. 23, 11:48 PM
- Tesla Motors (NASDAQ:TSLA) and SolarCity (NASDAQ:SCTY) are close to locking in terms on a merger, according to a fresh report from Reuters.
- Sources indicate that final discussions and the due diligence process could end within days.
- It's still unclear if SolarCity will land a go-shop provision which will allow it to press for other bids.
- SolarCity closed at $26.45 on Friday vs. the proposed buyout range from Tesla of $26.50 to $28.50.
Tue, Jun. 28, 9:16 AM
- Calling the bid for SolarCity (NASDAQ:SCTY) "ill-timed," now former bull Bill Selesky from Argus downgrades Tesla (NASDAQ:TSLA) to Hold from Buy. Tesla is also removed from Argus' Focus List.
- Should it happen, the deal, he says, pushes out the time needed for Tesla to generate a GAAP operating profit.
- "While we believe that Tesla has made significant strides in addressing issues concerning high manufacturing costs, contracting gross margins and production shortfalls, we also believe that the proposed acquisition of SolarCity adds a new level of meaningful risk to the operations at Tesla Motors."
- TSLA's 1.6% premarket gain is about inline with the averages. SCTY +3.05%
Mon, Jun. 27, 5:01 PM
- The committee of independent directors is made up of Donald Kendall and Nancy Pfund, with Kendall serving as chair. Skadden, Arps has been retained to assist.
- The two have the exclusive authority to evaluate the Tesla (NASDAQ:TSLA) proposal against stand-alone opportunities and/or other strategic alternatives.
- Several of the SolarCity (NASDAQ:SCTY) board, of course, have had to recuse themselves from any decision-making on the deal as they're Tesla directors as well.
Sun, Jun. 26, 5:19 AM
- Two additional SolarCity (NASDAQ:SCTY) board members are recusing themselves from making decisions regarding Tesla's (NASDAQ:TSLA) offer to buy the solar power firm since they sit on the boards of both companies.
- The announcement by Musk relative Peter Rive and Tesla CTO JB Straubel means the majority of SolarCity's seven-person board will be sitting out the vote on whether to be acquired by Tesla.
Wed, Jun. 22, 4:06 PM
- "A shameful example of corporate governance at its worst," says Jim Chanos, commenting on Tesla's (TSLA -10.5%) offer to buy SolarCity (SCTY +3%).
- He notes SolarCity's bonds yield 20%, suggesting a company in financial distress. The hundreds of millions in cash it is burning through each quarter will now be a burden Tesla owners will have to bear.
- Consider this, he says: The combined market drop today is greater than the equity value of the deal itself - meaning Tesla shareholders think SCTY stock is essentially worthless.
- "Finally, it is hard for me to believe that this deal was not being contemplated when Tesla, and Mr. (Elon) Musk himself, sold shares just a few weeks ago."
- Chanos, of course, is short the stock of both companies.
Tue, Jun. 21, 6:54 PM
- Elon Musk considers Tesla's (NASDAQ:TSLA) potential deal for SolarCity (NASDAQ:SCTY) a "no brainer" that would transform TSLA into "the world's only vertically integrated energy company offering end-to-end clean energy products to our customers," from solar panels and home storage batteries to electric vehicles.
- SCTY investors like the idea, of course, sending shares +15% AH, but TSLA shareholders clearly are skeptical; TSLA now -11%.
- CNBC Fast Trader Tim Seymour says the deal's timing of the deal seems "distracting," citing TSLA's struggles to meet sky-high expectations for deliveries and its mass market car.
- Some back of the envelope math from Ben Levisohn at Barron's points to another dilution - this time to the tune of ~12M shares - after raising money last month for the Model 3 build.
- "This deal defies common sense," writes Heard On The Street's Spencer Jakab: "Banding together with another cash-hungry business simply because it is also green and may one day make use of Tesla’s batteries may excite some investors and burn short sellers in SolarCity’s stock. But, as Mr. Musk warned about his amphibious wonder car, such harebrained schemes can only float 'for short periods of time.'”
Tue, Jun. 21, 5:30 PM
- Solar City (NASDAQ:SCTY) +22.3% AH after Tesla (NASDAQ:TSLA) says in a blog post that it has made an offer to acquire the company; TSLA -10% AH.
- TSLA proposes an exchange ratio of 0.122x to 0.131x shares of Tesla common stock for each share of SCTY, which represents a value of $26.50-$28.50/share, or a 21% premium over today's closing price.
- TSLA says its proposal builds on a partnership between the two companies where SCTY uses TSLA battery packs as part of its solar projects.
Jun. 17, 2014, 10:27 AM
- No one ever accused Elon Musk's companies of thinking small: In a blog post discussing SolarCity's (SCTY) acquisition of module developer Silevo, the company states it's in talks with the state of NY to build an initial module plant with "a targeted capacity of greater than 1GW."
- Moreover, the company will later build "one or more significantly larger plants at an order of magnitude greater annual production capacity."
- SolarCity, in remarks that bring to mind Tesla's Gigafactory plans: "Our intent is to combine what we believe is fundamentally the best photovoltaic technology with massive economies of scale to achieve a breakthrough in the cost of solar power."
- In spite of today's module capacity glut, SolarCity asserts shortages are only a matter of time as solar demand grows, in the absence of huge investments. SolarCity has thus far relied on 3rd-party module suppliers for its installations.
- Silevo claims its Triex technology enables solar cells with 22%+ efficiency and 5%-12% greater energy harvest in arid climates, while remaining cost-competitive with low-cost silicon cell producers. The company has been eying both residential/commercial and utility-scale projects.