How To Buy Solarcity Stock
Tesla is listed on the Nasdaq Global Select Market (Nasdaq GS) under the ticker symbol TSLA. The company went public in 2010 and currently has a market capitalization of more than $1 trillion. Over the last 52 weeks, Tesla stock reached a high of $384.29 and a low of $101.81. Its most recent closing price was $195.28.
how to buy solarcity stock
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Here are some key terms of today's announcement: this is an all-stock transaction with an equity value of $2.6 billion based on the 5-day volume-weighted average price of Tesla shares as of July 29, 2016. Under the agreement, SolarCity stockholders will receive 0.110 Tesla common shares per SolarCity share, valuing SolarCity common stock at $25.37 per share based on the 5-day volume weighted average price of Tesla shares as of July 29, 2016.
In October 2014, SolarCity announced it would be offering up to $200 million in solar bonds in its first registered public offering of bonds in the United States. In March 2016, SpaceX bought $90 million of SolarCity stock.
On August 1, 2016, Tesla announced that it would be acquiring the company in an all-stock $2.6 billion transaction as Tesla's mission since its inception has been "to accelerate the world's transition to sustainable energy." As part of Elon Musk's "The Secret Tesla Motors Master Plan," Tesla sought to expedite the world's move from a mine-and-burn hydrocarbon economy towards a solar electric economy. The proposal for acquisition was approved by antitrust regulators.
Tesla's CEO gave 0.110 Tesla shares to SolarCity stockholders for every share they owned in the solar-energy company. Based on the electric-car maker's $230 stock price in late July 2016, the deal valued each SolarCity share at $25.36 at the time.
Musk used one of Warren Buffett's analogies to downplay the significance of Tesla's stock price last year. However, he seems to have missed the famed investor's warning about his "most gruesome mistake."
The companies said SolarCity stockholders would receive 0.110 Tesla common shares for every share held, valuing SolarCity at $25.37 per share based on the 5-day volume weighted average price of Tesla shares as of Friday.
The article was supposed to be the first of a series, but it seems the writer never followed up or is still planning to follow up. Maybe he just decided to jump in and buy SolarCity stock, skipping the rest of the series. That seemed to be the way he was heading.
Investor reaction to the timing was mixed. Tesla's stock dropped more than 12 percent in after-hours trading; SolarCity's stock rose more than 15 percent. In order for the acquisition to close, Tesla and SolarCity shareholders will need to approve it once negotiations and due diligence are completed.
Solar stocks have been hit hard in 2016. SolarCity's stock is down nearly 60 percent from the start of the year. Even after paying a premium of 21 percent to 30 percent per share, Tesla's acquisition would come at a good time. Tesla's stock is strong, and the company now has an opportunity to buy a solar company with consistent cash flows on the cheap.
Recent experience would suggest this kind of expansion is fraught with risk. After SunEdison unveiled plans to buy up Vivint Solar last July, shareholders balked at the move -- sending the company's stock into a tailspin. SunEdison took on too much debt and expanded far beyond its core development business. Investors hated the deal. And now SunEdison has paid the ultimate price: bankruptcy.
SolarCity (SCTY) stock combusted Wednesday after the No. 1 residential installer guided to weak Q1 installations and failed to assuage investor concerns about the rising cost of capital.
Current-quarter views for 180 MW, up 18% year over year, don't jibe with 2016 guidance for 1.25 gigawatts, up 44%, Needham analyst Y. Edwin Mok wrote in a research report. Mok retained his hold rating on SolarCity stock.
Solar stocks have been beaten up since oil started to drop this summer and SolarCity (SCTY.DL) hasn't been spared the drop. Shares are near their lowest point in a year and off nearly 40% from their all-time high.
A top solar stock with significant risksAs SolarCity navigates the solar industry it will need to adapt and change. The leasing company you see today will look very different in five years. It will likely sell more systems than it leases and new components like energy storage and smart home controls will be a key to selling solar systems. But few companies are as willing to adapt as SolarCity.
SolarCity's current $5 billion market cap provides plenty of upside if the value outlined above plays out. But there's also risks that investors can't ignore. I think SolarCity's stock is a top solar stock and a solid buy today, but it's far from a bargain given the competition and risks in the U.S. solar market.
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It's been a difficult day for the stocks of residential solar installers and financiers.SolarCity posts larger-than-expected lossSolarCity had strong revenue but shares fell after the leading solar installer/financier posted a larger-than-expected loss for the first quarter of 2016, while forecasting a disappointing guidance.
Baird notes, "SCTY beat on revenue and installations, but lowered FY:16 guidance due to weak Q1 bookings, and also had a significant increase in customer acquisition costs (although this is expected to be temporary). We want to get more constructive on the stock but think management has ruined its credibility for now, although the Musk/Reeve relationship should attract long-term growth investors. We believe the stock will be under pressure as investors recalibrate expectations, which could provide an attractive entry point."
The decision to finance the deal entirely with TSLA stock could be a savvy one for Tesla, as its shares currently trade for 80 times forward earnings. Using overvalued stock for acquisitions is arguably better than using cash, since it doesn't hurt liquidity and also minimizes the dilution that will take place from putting more TSLA stock on the market.
In a filing with the Securities and Exchange Commission, Tesla said SolarCity is now its wholly owned subsidiary. The all-stock deal converted each SolarCity share into 0.11 Tesla shares, and SolarCity is no longer listed in the NASDAQ market quotes.
Tesla founder and CEO Elon Musk is also the co-founder and chairman of SolarCity, which is run by fellow co-founder and CEO Lyndon Rive and his brother, CTO Peter Rive -- both of them Musk's cousins. Musk owns 22% of SolarCity's stock and 21% of Tesla.
Industry experts say the plans by Tesla to buy SolarCity in a $2.7 billion all-stock deal announced last week aren't likely to work out for several reasons -- including similarities between the companies.
Tesla shares tumbled more than 10% after the all-electric carmaker announced the planned takeover. Conversely, SolarCity's stock, which has been steadily dropping over the past two years, experienced a modest uptick on the announcement.
"SolarCity still has the potential to hurt Tesla. We've already seen how the market responded to the acquisition with Tesla's stocks going down given the huge debt load of SolarCity -- there's always the possibility of bankruptcy," Ogden said. "But, given the way SolarCity is moving, I don't see [SolarCity] following a similar path of Sun Edison, largely because of its vertical integration strategy."
SolarCity Corp. is a consumer solar power and solar financing company backed by famous entrepreneur Elon Musk. The stock had its IPO in 2012, surging nearly 50% on its first day of trading on the back of broad investor enthusiasm, despite skepticism on Wall Street. It traded under the stock symbol: SCTY.
Ultimately shareholders of Tesla have not yet experienced any undue negative effects when strictly looking at the returns of Tesla stock since the deal closed in 2016. In fact, Tesla has been one of the best performing major stocks over this period.
Investors were skeptical of the deal from the beginning, and Tesla stock plummeted by more than 10% upon the June announcement. Going into 2016, SolarCity stock was already plunging and the company was going through layoffs.
This year, Tesla has been making moves to acquire much of the company. In March, Musk's rocket venture SpaceX bought $90 million of SolarCity stock. In late June, Tesla submitted an offer to buy SolarCity for $2.6 billion, and in August, the company accepted.
Electric car manufacturer Tesla announced its intention to buy SolarCity for $2.6 billion in stock in a blog post(Opens in a new tab) a little more than a month after it initially proposed(Opens in a new tab) the transaction. 041b061a72