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Top 8 tidbits around the Tesla-SolarCity deal

Published

9 years ago

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Tesla Store in Melbourne, Australia [Source: cybershack.com.au]

Tesla management held an investor’s relations call earlier today to discuss some of the details surrounding the company’s offer to acquire SolarCity. The one and a half hour call saw Tesla CEO and SolarCity chairman Elon Musk reveal some of the rationale behind the proposed buyout.

Though most of the webcast did not reveal more detail than what was already announced, there were a few tidbits around the Tesla-SolarCity deal that we thought was worth resurfacing.

  1. Most merger and acquisition deals are disclosed when the details are finalized, but given Musk’s involvement with both companies, Tesla needed to disclose this proposed deal at the beginning of the process. Because this is an “announcement” and not an “offer”, the process moving forward will be very much in the open.
  2. SolarCity should not need cash infusion, but Tesla will provide bridge loans if needed, though Musk swears it is not needed.
  3. Tesla stores and galleries will still be able to sell Tesla power storage and SolarCity panels even if they cannot sell cars (referring to State opposition to sell cars direct).
  4. The deal unifies the company’s strategy to transition to sustainable energy. In order to have sustainable energy you need a) sustainable production (mainly solar), b) storage (Powerwall) and c) transport of energy (electric cars). Consumers will have the opportunity to go to a Tesla gallery and buy all 3 items: car, Powerwall, solar panels with inverter.
  5. Musk said that by combining Tesla and SolarCity, they have the potential to become a trillion dollar company.
  6. Tesla’s board has approved the offer that was made, but SolarCity is still in the process of setting up their board, before moving into due diligence (2-3 weeks), where they will iron out the merger agreement and disclosure proxy statement. Shareholders from each side will vote on actions in the next few months. Musk says that from a timing perspective, maybe this could have been done sooner.
  7. Elon Musk took a famous quote from the late Steve Jobs to describe the rationale behind integrating Tesla with SolarCity. “Integrated products that work together work better, one integrated system ‘it just works’.”
  8. If the deal goes through, expect Tesla stores to have a significantly changed look. It won’t be a display for just cars, but expect to see batteries and solar panels systems.

The entire discussion can be heard via Tesla’s webcast.

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Investor's Corner

Elon Musk praises Ray Dalio’s Bridgewater for accumulating TSLA stock

Published

3 weeks ago

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February 14, 2025

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Credit: Tesla Asia/X

A recent 13-F filing from legendary investor and billionaire Ray Dalio’s Bridgewater Associates has revealed that the hedge fund has added over $62 million worth of Tesla stock (NASDAQ:TSLA) to its portfolio.

Elon Musk has praised the billionaire’s investment in a post on X.

Bridgewater’s TSLA stake:

  • As per Bridgewater’s 13-F filing, it currently holds 153,589 shares of TSLA, which costs $62,025,382.
  • The firm added the TSLA shares in the fourth quarter.
  • Tesla shares gained momentum after its Q3 2024 earnings call, and it only gained more strength after the election of U.S. President Donald Trump.
  • At the end of 2024, Tesla shares were up 62%, as noted in a MarketWatch report.
  • Tesla stock is still up 88% over 12 months despite a steep drop over the past month.

A vote of confidence: 

  • Bridgewater Associates is one of the largest hedge funds in the world, so the firm’s stake in TSLA could be interpreted as a vote of confidence in the electric vehicle maker.
  • Elon Musk has praised the firm’s investment. In a post on X, Musk noted that Bridgewater’s investment was a “smart move.”
  • Elon Musk has been quite consistent on his idea that Tesla could eventually become the world’s most valuable company. He emphasized this point during the Q4 2024 earnings call.
  • “I see a path. I’m not saying it’s an easy path but I see a path of Tesla being the most valuable company in the world by far. Not even close. There is a path where Tesla is worth more than the next top five companies combined,” Musk said.

Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.

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Investor's Corner

Tesla (TSLA) gets $475 price target and “Buy” rating from Benchmark

Published

4 weeks ago

on

February 12, 2025

By

Credit: Tesla

Tesla shares (NASDAQ:TSLA) have received a “Buy” rating and a $475 per share price target from Benchmark.

Benchmark’s price target is based on 68.2 times its 2028 earnings before interest, taxes, depreciation, and amortization (EBITDA), as noted in a Morningstar report.

Tesla rating:

  • In a note to clients, Benchmark analyst Mickey Legg noted that Tesla has outlined a path towards more growth through several of its initiatives.
  • These include Tesla’s work in autonomous driving systems, robotics, and energy generation.
  • The company could also make more headway into the electric vehicle segment.
  • “The company has outlined a path for growth with a more affordable vehicle scheduled for 1H25, unsupervised full self-driving as a paid service this June in Austin, TX, and Optimus robot production ramp through 2026 and beyond,” the analyst stated.

More potential:

  • While he sees potential in Tesla, the Benchmark analyst noted that his current model only incorporates vehicle growth. 
  • Thus, there could be “significant potential upside” if the company’s autonomous vehicle program and Optimus are scaled.
  • “Tesla’s market leadership, near-term catalysts, strong management, and diversified business justify the stock’s market premium,” Legg noted.

Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.

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Tesla is ‘better-positioned’ as a company and as a stock as tariff situation escalates

Published

1 month ago

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February 3, 2025

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The Cybertruck-towed Model Y ad at Hayden Planetarium. Credit: Tesla North America | X

Tesla is “better-positioned” as a company and as a stock as the tariff situation between the United States, Mexico, and Canada continues to escalate as President Donald Trump announced sanctions against those countries.

Analysts at Piper Sandler are unconcerned regarding Tesla’s position as a high-level stock holding as the tariff drama continues to unfold. This is mostly due to its reputation as a vehicle manufacturer in the domestic market, especially as it holds a distinct advantage of having some of the most American-made vehicles in the country.

Analysts at the firm, led by Alexander Potter, said Tesla is “one of the most defensive stocks” in the automotive sector as the tariff situation continues.

The defensive play comes from the nature of the stock, which should not be too impacted from a U.S. standpoint because of its focus on building vehicles and sourcing parts from manufacturers and companies based in the United States. Tesla has held the distinct title of having several of the most American-made cars, based on annual studies from Cars.com.

Its most recent study, released in June 2024, showed that the Model Y, Model S, and Model X are three of the top ten vehicles with the most U.S.-based manufacturing.

Tesla captures three spots in Cars.com’s American-Made Index, only U.S. manufacturer in list

The year prior, Tesla swept the top four spots of the study.

Piper Sandler analysts highlighted this point in a new note on Monday morning amidst increasing tension between the U.S. and Canada, as Mexico has already started to work with the Trump Administration on a solution:

“Tesla assembles five vehicles in the U.S., and all five rank among the most American-made cars.”

However, with that being said, there is certainly the potential for things to get tougher. The analysts believe that Tesla, while potentially impacted, will be in a better position than most companies because of their domestic position:

“If nothing changes in the next few days, tariffs will almost certainly deal a crippling blow to automotive supply chains in North America. [There is a possibility that] Trump capitulates in some way (perhaps he’ll delay implementation, in an effort to save face).”

There is no evidence that Tesla will be completely bulletproof when it comes to these potential impacts. However, it is definitely better insulated than other companies.

Need accessories for your Tesla? Check out the Teslarati Marketplace:

Please email me with questions and comments at joey@teslarati.com. I’d love to chat! You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.

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