John Hancock Deal Debunks SolarCity's Value Generation Myth
EnerTuition • 114 Comments
EnerTuition • 114 Comments
Hawaii Net Metering Changes Have Far-Reaching Consequences For Residential Solar Industry
EnerTuition • 155 Comments
EnerTuition • 155 Comments
Required Reading Ahead Of SolarCity Analyst Day
Contrarian PM • 35 Comments
Contrarian PM • 35 Comments
Yesterday, 5:47 PM
- Jim Chanos tells CNBC he is still shorting Caterpillar (NYSE:CAT) since the company's fundamental story has not changed, and reiterates the combination of Tesla (NASDAQ:TSLA) and SolarCity (NASDAQ:SCTY) is "completely perplexing" and "makes no sense."
- CAT is up ~30% YTD but Chanos claims "the fundamentals by our view have not yet changed... [regarding the real estate and debt bubble in China] the collapse has not happened, the unwind has not happened. That's ahead of us, not behind us."
- "The supercycle in commodities that peaked out in '11 and '12... was a once-in-a-lifetime kind of thing," Chanos says. "The overcapacity that exists in mining, mining equipment, construction equipment is serious."
- On TSLA, Chanos says the company would double its cash burn by taking over SCTY and calls the deal a “big distraction.”
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.
Wed, Oct. 12, 10:27 AM
- A special meeting of Tesla Motors (TSLA +1%) shareholders will take place on November 17 to vote on the SolarCity (SCTY +2.3%) merger plan.
- Tesla expects to issue ~11,080M shares of Tesla common stock to SolarCity shareholders in connection with the deal, which would result in Tesla shareholders owning ~93.1% of the Tesla-SolarCity amalgam and former SolarCity stockholders holding ~6.9% of the combined entity.
- SEC Form Schedule 14A
Mon, Oct. 10, 2:07 AM
- Contradicting last week's regulatory filing, Elon Musk said Tesla (NASDAQ:TSLA) would not need to raise equity or corporate debt in Q4 for its planned acquisition of SolarCity (NASDAQ:SCTY), and will "probably not" need to raise funds in first quarter of 2017 "either."
- In another Twitter message posted Sunday, he wrote "Tesla product unveiling on the 17th (unexpected by most), followed by Tesla/SolarCity on the 28th." Is a new solar energy system on the way?
Thu, Oct. 6, 3:24 PM
- Formerly bearish Axiom Capital analyst Gordon Johnson upgrades his rating on the solar energy sector (TAN +0.5%) by two notches to Overweight from Underweight, and raises his ratings on Yingli Green Energy (YGE +4.6%), Trina Solar (TSL +1.3%) and JA Solar (JASO +4.5%) to Buy from Sell, as well as SolarCity (SCTY -2.6%) to Hold from Sell.
- A key reason for Johnson's "new-found solar optimism" is China's decision to cut solar subsidies, which could result in ~25 GW of Chinese “pull-in” demand in H1 2017, suggesting a undersupply in the solar market that should push prices higher.
- Johnson believes the stronger demand will cause the prices of all kinds of solar equipment to surge, resulting in higher margins and multiples for many solar companies.
- Also: OTCPK:SUNEQ +63% (see earlier), CSIQ +0.7%, SPWR +0.3%, FSLR -0.3%.
Wed, Oct. 5, 7:13 AM
- The company expects to open a local operations installation center in the Charleston area at the end of this month, and is actively hiring installers and salespeople now.
- A new loan program is behind the entry: SolarCity (NASDAQ:SCTY) is offering South Carolinians the option of 10- or 20-year loans to purchase their systems.
Wed, Sep. 28, 10:48 AM
- SolarCity (SCTY +0.7%) aims to invest as much as $1B in Mexico over the next five years, but will depend on Mexico keeping at current levels its net metering incentive that requires utilities to buy surplus power generated by rooftop solar panels, the company's Mexico unit tells Reuters.
- Net metering in Mexico is capped for solar projects at up to 500 KW of installed capacity, but SolarCity Mexico president David Arelle is concerned that due to pressure on public finances, the government could push the threshold as low as 50 KW.
- "That would kill the business," Arelle says, adding that net-metering is crucial to project finance, providing buyers certainty on the cost of the electricity over many years.
Wed, Sep. 28, 9:17 AM
- SolarCity (NASDAQ:SCTY) names Radford Small as its new CFO, as President Tanguy Serra, who also oversaw finance, will leave the company at the end of the year.
- Small joined SCTY in 2015 from Goldman Sachs, where he was a managing director and COO for clean technology and renewables group and spent 17 years in investment banking.
- SCTY also announces a partnership with Citi to create two separate funds to finance more than $347M in solar projects.
Mon, Sep. 26, 6:48 PM
- Noting the substantial spread between SolarCity's (NASDAQ:SCTY) share price and Tesla's (NASDAQ:TSLA) acquisition price, Baird analyst Ben Kallo sees a short-term trading opportunity in SCTY and predicts with an 80% probability that the merger of the two companies occurs.
- Kallo also thinks SCTY’s recent cash equity sale and positive regulatory developments in Nevada have helped to reduce concerns over the company’s ability to monetize its assets and worries that additional states may use Nevada as a precedent for changes in net metering programs.
- For the long term, however, Kallo keeps a Neutral rating and $25 price target on SCTY.
Thu, Sep. 22, 2:49 PM
- Tesla Motors (TSLA +0.8%) aims to show off its new solar power/battery storage/EV charging system on October 28, according to CEO Elon Musk.
- The integrated product features a first-of-its-kind solar roof, along with the next-gen Powerwall and an updated EV charger.
- The Tesla Master Plan Part Deux calls for "stunning" solar roofs with seamless battery storage integration.
- Shareholders of Tesla and SolarCity (SCTY +2.7%) are expected to vote on the merger some time in October.
Mon, Sep. 19, 12:00 PM
- Tesla Motors (TSLA +1%) says a series of lawsuits challenging the acquisition of SolarCity (SCTY -1.5%) could delay the closing of the deal.
- The four separate legal challenges weren't entirely unanticipated, but the company notes in its filing that the potential for an injunction blocking forward motion on the deal is now in the mix.
- SEC Form S-4/A
Fri, Sep. 16, 2:57 PM
- A deal between Berkshire Hathaway’s NV Energy (BRK.A, BRK.B) and SolarCity (NASDAQ:SCTY) that will roll back rate hikes for existing rooftop solar customers is approved by the Nevada Public Utilities Commission.
- The vote was expected after the companies earlier this week asked the PUC to approve an agreement that would grandfather those who signed up to use home solar prior to January under more favorable rates for 20 years.
- The agreement will protect more than 32K Nevada rooftop solar customers from higher fees that took effect in January.
Fri, Sep. 16, 11:23 AM
- The Senate Finance Committee and the House Ways and Means Committee have launched a formal investigation into whether solar energy companies improperly received billions of dollars in tax incentives from the Obama administration.
- The committees sent letters to three companies in the residential solar industry - SolarCity (NASDAQ:SCTY), Sunrun (NASDAQ:RUN) and Sungevity - and four solar utility firms - SunEdison (OTCPK:SUNEQ), Abengoa (NASDAQ:ABGB), NextEra Energy (NYSE:NEE) and NRG Energy (NYSE:NRG).
- At issue is a Treasury Department policy that gives solar firms a 30% investment tax credit on the cost of acquiring a system, but solar energy developers do not always have the income to use the credits or the funds to buy and install solar energy systems, so they routinely enlist big investors and transfer the tax benefits.
Tue, Sep. 13, 5:36 PM
- Berkshire Hathaway's (BRK.A, BRK.B) NV Energy, Solar City (NASDAQ:SCTY) and Nevada regulators reportedly reach an agreement to grandfather eligible customers under older, more favorable rates for customers who installed residential rooftop solar systems before this year.
- The grandfathering agreement will apply to ~32K customers, including those who had a pending application on Dec. 31, 2015; the rates had been raised in December and retroactively applied to existing customers.
- The deal still must be approved by the Nevada Public Utilities Commission, which is expected to vote on it on this week.