5 ms·

As a Solar City shareholder, I think I'm getting screwed. Solar City, at $26.70/share last Friday has a lot more upside than TSLA at ~$235. Hell, I lost almos

by jaynos 10y ago

As a Solar City shareholder, I think I'm getting screwed. Solar City, at $26.70/share last Friday has a lot more upside than TSLA at ~$235. Hell, I lost almost 5% over the weekend due to where they priced this deal.

toomuchtodo 10y ago
You're only getting screwed if a higher offer isn't made by someone else. Disclaimer: TSLA investor.
coliveira 10y ago
You're completely right. TSLA investors are being used to save a company with uncertain future.
- thaumasiotes 10y ago
  Except jaynos is claiming the opposite -- that Solar City shareholders are getting screwed over to benefit Tesla shareholders. It's easy to understand your point of view; jaynos's is a little more mysterious.
tomp 10y ago
Why would the price of the share be relevant (as opposed to e.g. the market capitalization of the company)?
- deleted 10y ago
  [deleted]
- sp332 10y ago
  jaynos is saying that TSLA is unlikely to go much above $235, but Solar City had a lot of potential to move above $26.70. By converting them now, they've basically thrown away all the potential future movement.
  - mikeyouse 10y ago
    The point is, that share prices are absolutely meaningless without the number of shares which just gives you market capitalization. Tesla could just do a 8:1 split and their per-share price would be $30/share -- Would that change their upside? Of course not.
    - pavlov 10y ago
      Presumably jaynos meant those prices are relevant in relation to historical prices: Tesla is near all-time highs, while SolarCity's share price has been around $75 at one point. I do agree with another poster that SolarCity was more likely to be heading towards $0, rather than back to $75.
  - rhino369 10y ago
    Potential upside is considered by the market in current pricing.
- jaynos 10y ago
  I agree. I should have referenced market cap to give a useful argument. My thinking may be wrong, but here's what I have: 1. TSLA is close to it's all time high. SCTY is well below it's all time high (Granted, I don't see it going back to $80+ anytime). 2. TSLA market cap (34.5B) is 70% that of Ford (49.3B) or GM (49.7B). I know Ford and GM are probably undervalued and there are many differences between them and Tesla, but this suggests to me that Tesla is overvalued. 3. Solar City market cap is 2.4 billion. Solar City has a market share in the US of 34% (approx). Solar City market cap compared to the rest of the industry makes sense. 4. The Solar Industry is here to stay. Solar City, as the US leader, is not going bankrupt (the Tesla board of directors agrees with me on this or they would not approve the deal). Investments would swing back to SCTY at some point pushing the stock to $40-$50 (or ~4-5 billion in market cap).
  - anonbanker 10y ago
    If anything, Solar City is a (the?) money-making engine for Tesla now. You're correct that your investment is undervalued in the stock split. Contact a good attorney and begin a lawsuit (avoid class-action) against Tesla for this bargain-sale buyout. Makes me wish I had bought SCTY stock for the opportunity to file on my own.
tcoppi 10y ago
Usually buyouts like this are priced well above the current trading range of the acquisition, presumably in order quell shareholder opposition. In this case I think it is probably a more than fair price for SolarCity, even though it is lower than where it has been trading. SolarCity's future prospects at this point mostly hinge on integrating with storage technology, now that net metering is starting to get killed off slowly. Tesla can provide that, so it is only fair they get them at a bit of a discount. If someone else who can pay comes along and thinks they are worth more, they will.
URSpider94 10y ago
What's your basis for thinking that SolarCity has more upside than Tesla?
jonknee 10y ago
The dollars per share are meaningless, but SCTY was heading rapidly towards $0. I think you got the better end of the deal (I don't currently have shares in either firm).
cowkingdeluxe 10y ago
The biggest reason SCTY went up to ~$26.70 was because of the announcement a few weeks ago (which speculated $26 to $28 buyout price). I don't think anything unfair happened to you.

by jaynos 10y ago

toomuchtodo 10y ago

You're only getting screwed if a higher offer isn't made by someone else. Disclaimer: TSLA investor.

coliveira 10y ago

You're completely right. TSLA investors are being used to save a company with uncertain future.

thaumasiotes 10y ago
Except jaynos is claiming the opposite -- that Solar City shareholders are getting screwed over to benefit Tesla shareholders. It's easy to understand your point of view; jaynos's is a little more mysterious.

tomp 10y ago

Why would the price of the share be relevant (as opposed to e.g. the market capitalization of the company)?

deleted 10y ago
[deleted]
sp332 10y ago
jaynos is saying that TSLA is unlikely to go much above $235, but Solar City had a lot of potential to move above $26.70. By converting them now, they've basically thrown away all the potential future movement.
- mikeyouse 10y ago
  The point is, that share prices are absolutely meaningless without the number of shares which just gives you market capitalization. Tesla could just do a 8:1 split and their per-share price would be $30/share -- Would that change their upside? Of course not.
  - pavlov 10y ago
    Presumably jaynos meant those prices are relevant in relation to historical prices: Tesla is near all-time highs, while SolarCity's share price has been around $75 at one point. I do agree with another poster that SolarCity was more likely to be heading towards $0, rather than back to $75.
- rhino369 10y ago
  Potential upside is considered by the market in current pricing.
jaynos 10y ago
I agree. I should have referenced market cap to give a useful argument. My thinking may be wrong, but here's what I have: 1. TSLA is close to it's all time high. SCTY is well below it's all time high (Granted, I don't see it going back to $80+ anytime). 2. TSLA market cap (34.5B) is 70% that of Ford (49.3B) or GM (49.7B). I know Ford and GM are probably undervalued and there are many differences between them and Tesla, but this suggests to me that Tesla is overvalued. 3. Solar City market cap is 2.4 billion. Solar City has a market share in the US of 34% (approx). Solar City market cap compared to the rest of the industry makes sense. 4. The Solar Industry is here to stay. Solar City, as the US leader, is not going bankrupt (the Tesla board of directors agrees with me on this or they would not approve the deal). Investments would swing back to SCTY at some point pushing the stock to $40-$50 (or ~4-5 billion in market cap).
- anonbanker 10y ago
  If anything, Solar City is a (the?) money-making engine for Tesla now. You're correct that your investment is undervalued in the stock split. Contact a good attorney and begin a lawsuit (avoid class-action) against Tesla for this bargain-sale buyout. Makes me wish I had bought SCTY stock for the opportunity to file on my own.

tcoppi 10y ago

Usually buyouts like this are priced well above the current trading range of the acquisition, presumably in order quell shareholder opposition. In this case I think it is probably a more than fair price for SolarCity, even though it is lower than where it has been trading. SolarCity's future prospects at this point mostly hinge on integrating with storage technology, now that net metering is starting to get killed off slowly. Tesla can provide that, so it is only fair they get them at a bit of a discount. If someone else who can pay comes along and thinks they are worth more, they will.

URSpider94 10y ago

What's your basis for thinking that SolarCity has more upside than Tesla?

jonknee 10y ago

The dollars per share are meaningless, but SCTY was heading rapidly towards $0. I think you got the better end of the deal (I don't currently have shares in either firm).

cowkingdeluxe 10y ago

The biggest reason SCTY went up to ~$26.70 was because of the announcement a few weeks ago (which speculated $26 to $28 buyout price). I don't think anything unfair happened to you.