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.
Thu, Jun. 16, 7:52 AM| Thu, Jun. 16, 7:52 AM | 68 Comments
Dec. 10, 2015, 10:23 AM
- "We believe an acquisition of GoPro (NASDAQ:GPRO) would make sense for Apple (NASDAQ:AAPL); action cameras are uniquely positioned at the intersection of Apple’s smartphone, wearables, and multimedia offerings," writes FBR's Daniel Ives in a note about potential Apple buyout targets.
- Ives: "Additionally, GoPro’s new product cycles could open the door to areas where Apple’s competitors are investing heavily (e.g., drones, VR), and Cupertino has been playing catch-up. We also see strategic value in GoPro being integrated with Apple’s strong multimedia ecosystem (e.g., iTunes, Apple TV, etc.)."
- Media/ad software giant Adobe (ADBE - $44.4B market cap), enterprise cloud storage/file-sharing leader Box (BOX - $1.6B market cap), and EV/battery maker Tesla (TSLA - $30B market cap) are also named as potential Apple targets. "Box would give Apple an avenue into enterprise storage and enable it to expand its product tentacles (hardware/storage) into the enterprise cloud frontier ... Adobe would provide a nice pipeline into the enterprise ... Adobe’s Document Cloud/Marketing Cloud applications are helping enterprises grapple with the growth of digital marketing, proliferation of mobile devices in the enterprise, and IOT."
- The GoPro remarks come with the action camera leader down 82% from its Oct. 2014 high of $98.47, and sporting a $2.4B market cap. In other news, GoPro announced today it has added Apple Watch support for its iOS app.
- Recent GoPro coverage
- Update (11:48AM ET): GoPro is now up 8.9%. Also announced today: GoPro states its drone (due in 1H16) will be known as Karma. A teaser video has been released.
- Update 2 (2:30PM ET): GoPro is now up 14%. Given a short interest of 31.2M shares (47% of the float) as of Nov. 30, short-covering is likely playing an important role.
Sep. 5, 2015, 12:02 PM
- News in the automobile industry this week continues to indicate seismic changes are coming.
- The Silicon Valley factor: A deeper commitment by Apple and Google in the automobile sector is widely anticipated, although an all-in bet on the manufacturing side is still considered a reach. Key acquisitions, partnerships, or joint ventures in software, self-driving technology, and infotainment systems could sort out the winners from the losers. German players BMW (OTCPK:BAMXY) and Mercedes-Benz (OTCPK:DDAIF) could be in the mix.
- The Sergio factor: Though the Fiat Chrysler Automobiles (NYSE:FCAU) CEO continues to make some bold projections on the powerful merger synergies a tie-up with General Motors (NYSE:GM) would create, his math works for other combinations within the industry as well. Nissan (OTCPK:NSANY), Tata Motors (NYSE:TTM), Honda (NYSE:HMC), and Volvo (OTCPK:GELYF) are each struggling in various markets.
- The Tesla factor: Tesla Motors (NASDAQ:TSLA) has engaged in a war of words with Toyota (NYSE:TM) in the electric vs. hydrogen debate. The EV automaker is also in a race with General Motors and Nissan over developing a mass-market EV with the driving range and sticker price to sell at scale. There's also been a tug-of-war over employees with Silicon Valley counterpart Apple. With so many enemies, some analysts think Tesla needs more friends in the space. Who has the ~$40B-$50B to buy out Elon or the moxie to strike a strategic partnership?
- Looking for a wildcard? Sony (NYSE:SNE) CEO Kazuo Hirai told the Financial Times this week that his company would absolutely partner with an automobile company if a deal makes sense.
Apr. 20, 2015, 9:51 AM
- What could have been: With Tesla (TSLA -0.5%) in dire straits in March 2013 as the company struggled to fix Model S bugs and convert pre-orders into actual sales, Elon Musk reached out to Larry Page and "proposed that Google (GOOG +1.6%) buy Tesla outright," Bloomberg's Ashlee Vance reports through an excerpt from a Musk book due out on May 19.
- Vance adds Tesla would've cost Google $6B at the time after factoring "a healthy premium" - Tesla's market cap is currently $25.9B. As part of the deal, Musk wanted Google to promise to invest $5B in factory expansions and let Musk run Tesla for 8 years, until it was ready to launch a mass-market car.
- While "Musk, Page, and Google’s lawyers negotiated the specific terms of the deal" in the following weeks, Tesla's Model S sales began to take off, and the company posted its first profit and repaid its DOE loan. No longer needing a white knight, Musk broke off talks.
- A $6B Tesla acquisition would've been one of Google's largest, surpassed in size only by Motorola Mobility. Google, of course, has kept pushing ahead with its self-driving car efforts since 2013; the company has said it's talking with GM, Ford, Toyota, and others about bringing a self-driving car to market by 2020. Tesla has some interest in this space as well.
- Last year, the San Francisco Chronicle reported Musk met with Apple M&A execs in 2013. Apple's reported car efforts have fueled fresh speculation the company will make a bid for Tesla.