Question for TSLA shareholders:
How do feel about assuming the $700 mill SCTY cash burn, and gaining exposure to the wretchedly horrible business of household solar panel installation? Moreover, how do you feel about $475 million of Elon Musk’s personal lines of credit being secured by the stock prices of SCTY and TSLA?
Clearly, this is a deal that Wall Street hates with every fiber of its existence. It beckons back to a time of the Robber Barons, when men like Commodore Vanderbilt and Jay Gould worked out shady deals for the explicit purposes of self aggrandizement.
TSLA is being obliterated in the pre market. The selling is just getting started too. The media cycle around this deal is going to be vicious and very mean spirited.
Many people believed SCTY was barreling towards bankruptcy. Those people will now be given prime time media spots and will shred investor confidence of TSLA and burn it to a cinder.
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I don’t like it. First time I have questioned owning Tesla shares since the $40s.
I’m sure a lot of shareholders feel the same.
With the coming economic cycle and TSLA accting creativity I believed they were the short of the century. Add solar city to the mix and I think Musk ends up alone on an island playing with his only friend Wilson. Musk almost lost TSLA once trying to juggle SpaceX in 2010. He is now juggling chainsaws. Unless they can issue neg int rate bonds there will be pain
You hit the nail on the head in an earlier article. Generally, TSLA was an inspirational “what-if?” sort of company, and Musk was that in human form. This casts an enormous shadow over both of those ideas.
What if the “what-if?” gets priced out of TSLA because of this “Robber Barron” [good descriptor] deal?
What if the perception of TSLA changes to “over-priced toxic battery car made for the faux-green limousine liberal” from “potentially revolutionary transit machine company?”
$133 seems like a good enough medium term price target. 61.8% retrace of the surge.
Ouch
The truth can be supressed only for so long. About eight years in the 21st century.
Assuming stupid rate long term debt is used to fund this (as with all things), I expect intense short term pain and an extraordinary long term reward. $SCTY is the long term beneficiary of $TSLA’s home storage battery program, so it’s a logical connection. Though it’s also predicated on NatGas going up at some point in the next 20 years as well.
I intend to buy the pain in increments and wait it out.
problem with your premise is calculating what tsla and scty would be worth or if they were even possible without government support. They are hanging on with pucker suction on the teet of the govt. Good luck. Would rather speculate in biotech and VR or Gold. At what point do shareholders ring the register and say …… well things have changed. Vision does not always translate to capitalism. One thing for R&D and cash burn on tech or biotech…..quite another for this type of ambition. Musk is already distracted with his hyperloop and whatever else he can concoct. As an invester I would be more comfortable on hyperfocus on TSLA and TSLA only.
I can’t dispute your reply, and I think you’re probably right in the short term.
But I have friends in the industry that think solar should be approaching price parity by the sunset of the 5 year extension in credits. If natural gas recovers within that time frame, it could become an attractive alternative. Who knows.
And $TSLA’s appeal is much deeper than any sort of government incentive.
My original intent was to buy more when the “Musk will never deliver on his ambitious timeframe” headlines for the new Tesla were hitting hard and killing the stock. As I’m sure that’s coming- he’s trying something that’s probably impossible, even with a sleeping bag on the assembly line. Combined with the beating that $SCTY will generate, that can hopefully be a pretty good price.
But I am also incredibly wary of any thesis based on one man. These are large companies with lots of intelligent (and not-so-intelligent) people engaged in the daily grind. If Musk gets distracted by going to space or some solar panels, a lot of the people involved in TSLA will probably enjoy getting the overbearing boss out from looking over their shoulders and getting some work done.
My time horizon on this investment is 20+ years, so my opinions probably don’t belong in the comments section of a trading site anyways.
Rumor has it that he’s hired Micheal Pearson to run it.
The timing of teslas massive expansion in the down cycle and then taking on solar city during oil crash.
Is desparation or hubris. I call hubris.
EGO
why is Tesla doing anything other than rolling out the first model 3? They took in billions of cash for pre-orders. Deliver on your product.
Everyone overreacting again.
Yeah, I don’t know why anyone is surprised. This is a guy who believes we are all avatars in a video game created by AI, and I can’t say he’s wrong. This is a spaceman, people, if not an outright alien. Dreamers don’t sit there counting their nickels.
Definitely need more people like him.
I agree. He is very creative, regardless of what happens to his stock at any particular time.
Shell Games.
would be funny if he has puts on his TSLA shares from which to gain in the short term, only to scuttle the deal later. After all, the puts are simply an insurance policy for his holdings. Especially if he is using them as collateral.
Musk’s Waterloo?
I sold my puts at open and got calls for next week instead. It hit the bottom of a bull flag on the 4h perfectly.