Tesla's Solar City acquisition conference call w/ Elon Musk [Full]


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Elon Musk sees Tesla (TSLA) become a trillion dollar market cap company with the SolarCity (SCTY) merger

During a conference call discussing the rationale surrounding Tesla’s (TSLA) offer to acquire SolarCity (SCTY) this morning, Elon Musk made a bold claim, something not unusual for the billionaire entrepreneur, he said that he sees potential for Tesla to become a trillion-dollar market cap company – which would be a first.

More at http://electrek.co/

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33 replies
  1. Kelly KitKat
    Kelly KitKat says:

    SCTY shareholders are getting robbed, as Solar City has just hit an inflection point – they posted net income of 50 million for q3 of 2016 .. and those quarterly profits are only going to keep rising quarter over quarter going forward.

    Reply
  2. Bryan Seigneur
    Bryan Seigneur says:

    27:00 "…and allowed you to go completely off grid"

    Solar City needs the grid to survive. Solar City is a virtual utility that requires good government regulation of the grid to survive. We probably don't have enough good government regulation of the grid to satisfy Musk's vision to stop the humanity's insane fossil fuel experiment. If Solar City is part of Tesla it does not have to rely on good grid policy to survive. Good grid policy will be a nice to have, and it'll make Tesla/Solar City more money, but in the states where grid policy is Neanderthal, Solar City's business can't even exist–unless it's combined with Tesla.

    TL;DR: Tesla combined with Solar City can take their customers off grid if the local PUC isn't cooperating with their renewable vision. Solar City can't do that by itself.

    Reply
  3. Erik X
    Erik X says:

    Haha, no wonder this makes sense. Less travel time and less overhead managing two companies instead of one. He should just merge Tesla with SpaceX as well while at it, then he can just sit in one big chair and control his empire!

    Reply
  4. Kelly KitKat
    Kelly KitKat says:

    In the 3Q15 report, Solar City management claimed that the Net Present Value of
    the Retained Value, (after covering all the debt payments owing) is about 33 dollars
    a share. (You can download the 3Q15 pdf report from Solar City's website.)
    If Tesla Motors wishes to acquire Solar City, given that that Retained
    Value is compounding at about a 20% rate a year, should they not pay Solar City
    shareholders a multiple of 33, say 66 dollars a share?

    Reply
  5. Kelly KitKat
    Kelly KitKat says:

    Customers would like "every thing" for free – so why not combine all companies into one giant Umbrella Company, and have products and services assigned on a needs only basis?  The Pope and Musk are on the same team.  For the one preaches Enviro-mentalism, and the other preaches "Hate greed" and "Profit is evil" – and so, the two philosophies together support the same agenda – to create a zero profit economy where there are no longer owners, but workers and managers only.  This will of course means that a Police State is needed to keep "the rebels" or a "rebel alliance" from threatening the New World Order.  You guys need to stop listening to arguments about what is best for the environment or the customer IF those arguments are coming from business managers – for managers are to represent the interests of the owners, the shareholders, first and foremost.  What business should do, or should not be allowed to do, in terms of products and services, subsidies or prices – ought to strictly be the domain of government. 
    What, you think it is a coincidence that private property rights are disappearing,
    while organizations such as the DHS or legislation such as the USA Patriot Act,
    are forced upon the people?  The USA Patriot Act is there to "hunt down" the patriots.  And the DHS, is not about "homeland" as in the domestic affairs of the
    nation – but the DHS is an INTERNATIONAL policing organization.  Now, some believe that the entire Earth is theirs, is their Homeland… This is what happens when you have ingnorant people in charge of illiterates – and will they not all
    fall into a ditch?  "Look, here is water.  What prevents me from being baptized?"  Well, apparently not God.  See, Acts 8:39, kjv.

    Reply
  6. raine2005
    raine2005 says:

    Absolutely brilliant. Who would choose Canadian Solar or First Solar over Tesla Solar? The name brand will sell at a premium and the solarcity gigafactory (Soon to be Tesla Solar Gigafactory) in Buffalo NY will ensure Tesla Solar panels are the best and cheapest in the world.

    Bravo Elon

    Reply
  7. Kelly KitKat
    Kelly KitKat says:

    3, rather than 2. Owners are important.
    "Haven't we learned anything?
    If we don't rebuild, the Jedis win".
    Owner. Manager. Workers. You can only
    eliminate owners – WITHOUT creating a police
    state – if there is no usury. Usury is when
    you look at another as if he, or she, was a
    resource, and treat him, or her, as such.
    National Socialism – Nazism – guards were
    used to police the workers who built the
    bunkers. If they got tired or sick, they were
    shot. How were those guards not slaves too?
    In a society where usury exists, private
    property rights essentially equate to liberty,
    and privacy. But in a police state, the people
    become property of the state, and more than
    this they seek access to the treasures of your
    mind, and to own that space too. Without "just
    cause" – sometimes a bush is a large shrub and not a
    small tree. Law enforcement has always looked like
    a fuzzy logic algorithm, but when all checks and
    balances disappear – well, legalized torture – it is
    as it was in the middle ages, again, is it not?
    The wars between Protestants and Catholics
    in Feudal England – Could you say, "We are Wiccans"
    or "Colour me undecided" and be left out of those
    theological political wars? They who sell beer and
    keep their mouths shut look wiser and wiser with
    each passing century. "Welcome to the Ratskellar.
    What can I get you, student radicals. OK, a Heinekken
    for Goebbels…"

    Reply
  8. Kelly KitKat
    Kelly KitKat says:

    This is a bad deal for solar city, the company being acquired. Wherefore are the shareholders of Tesla being permiited to vote on this proposed merger? Musk owns about 20 % of tesla, and about 10 % of solar city, so about 30 % of the 51 % of the votes required for this merger to go through. The only reason I think they are doing this is because they see themselves as being part of the ruling class, see tyranny as inevitable – so did Hitler – and wish to stop other shareholders of solar city from receiving about a 50 times return on their investment if they buy at say 25 dollars a share, over the next 20 years. Solar city can only find so many, say X number of qualified workers to install the panels. They may have reached that number, which means costs will now flatline as revenues continue to rise. Musk and Reeves hope to take those shares away before people realize what great economics this company has. This is keeping with the socialist agenda which president obama supports – making it illegal to have more than a million dollars…. It is not about
    money, as in dollars, for these people, but about money,
    as in slaves. Slavery is their end game. They are eugenicists. Obama – is he black? – he has a korean
    father, does he not?.

    A kid with a rock, and malicious intent… to lease, or to buy… if to buy, then to own… but if to own, then solar city could still sell the owner, insurance, at say 40 dollars a year, which would make solar city like Costco with its annual membership fee, and small razor thin profit margin on sale of goods.

    Reply
  9. Kelly KitKat
    Kelly KitKat says:

    If it is an acquisition, why should tesla shareholders be permitted to vote? Or is this a two step process? First the tesla shareholders decide if it is in their best interest to make the offer, THEN solar city shareholders decide if the offer is acceptable? For all, shareholders of both companies to vote simultaneously, would be unethical, and undemocratic. In the soviet union, people voted, but that did not make it a democracy.

    Reply
  10. Kelly KitKat
    Kelly KitKat says:

    elon musk's
    Proposed merger. It is thievery. And should under
    Antitrust laws be voided, since solar city should be
    Able to consider other energy storage technologies
    And not be locked into tesla's offerrings. But given
    How the Department of Justice never cared to void
    The merger between xm satellite radio, and sirius radio,
    Or declare john malone of liberty media, or disney
    Executives of white collar terrorism, for issuing
    Tracking stock (only worth what others pay for them,
    Representing no legal claim of ownership), i suspect
    They will permit this communist musk to do his evil
    Deed. Consider too financial journalists failures to
    Inform the public how bernie sanders never bought a
    Single share for his investors. Even the tv show starring
    Richard Dreyfuss failed to make that clear. His sons
    Had to have known. They simply issued statements of
    Ownership – "tracking stock".

    Reply
  11. Kelly KitKat
    Kelly KitKat says:

    Jim Chanos, the short seller, is bad at math
    and English. Solar city is not that capital
    Intensive. Panels come out of the factory,
    Like chocolates on a conveyor belt.
    They are heavy though – a shortage of
    skilled labour supply
    Is what is constraining, slowing down, growth.
    Subprime means "poor people
    with bad credit". But people who already own
    houses in well-kept neighbourhoods who lease
    solar panels, are not very likely to default on that
    debt. Subprime lending, is lending
    money to people with bad credit ratings,
    such as drug addicts, or middle aged exotic
    dancers, or illiterate war veterans with missing
    limbs, and African American males with criminal
    records. Banks got into trouble by lending
    money to subprime people to buy houses with,
    and then repackaging the debt owed as triple A credit
    rated bonds for investors, such as Hollywood
    producers, to buy. A Robin Hood strategy? Hardly,
    those AAA rated subprime credit derivatives,
    or whatever else they were called, ended up in
    retirement funds. Seniors counting on pensions
    became houseless. Reminds me of Trump U, and
    how many think that that kind of behaviour, committing
    acts of fraud, is normal, and ok – it is not. People
    Like Bernie Madoff and sons should be declared white
    Collar terrorists, and be given the death penalty.
    Assuming they did as the news media claims they did.
    Perception is reality, but reality may not be perception.
    That said, Solar City would do fine as a stand alone
    entity and make a better investment than Tesla.
    I hope as a shareholder of solar city common that
    the proposed merger is rejected. There is no economic
    benefit to either firm created by merging – no long
    term benefits for the stockholders (owners) of either
    company. (This is not the first time Musk has
    ignored owner-shareholder concerns : why did he give
    away Tesla's patent portfolio, and why does not tne
    SEC call such action what it truly is – sabotage, not in
    the interests of all shareholders' economic interest?)
    If Musk
    wishes to post a link to solar city on Tesla Company's webpage, to advertise which solar panels Tesla suggests
    work best with Tesla cars, let him do so. And if Solar
    City wishes to advertise that they think Tesla batteries
    are "the best", let them do so.
    But Musk's actions indicate a
    complete abdication of fiduciary responsibility to Tesla's
    shareholders as well as a disdain towards shareholders
    of solar city common. Are executioners friendly towards
    their prisoners? Then so to is this proposed merger,
    friendly. With friends like Musk and Reeves, who needs
    enemies?
    And the fact that he is
    proposing that Tesla shareholders be given a vote as
    to whether this merger should be allowed demonstrates
    a total disregard of ownership rights – ONLY shareholders
    of solar city should get to decide. I think Musk owns
    20% of Tesla, and 10 % of solar city, so 30 % of the
    51% of the votes needed, but only the shareholders
    of the company being acquired should be allowed
    to vote for, or against, this merger. In my opinion,
    Musk belongs in prison, as does his cousin,
    Lyndon Reeves of Solar City,
    for attempting to steal Solar City shares away from
    Solar City shareholders. They are as white collar
    terrorists for proposing this merger, in my opinion.
    For there are no significant or apparent economies of
    scale or scope to be gained by this proposed merger.
    How profitable might solar city be? It is like coca cola,
    or costco – serving households. Batteries or cars are
    one time purchases, and both competitive spaces.
    Gillette was less profitable post merger, and
    share appreciation
    evaporated, with their disastrous acquistion of Duracell
    Batteries Company. Tesla will weigh down Solar City's
    profitability. You do not have to be a genius to see
    this, I think.
    Costco and coca cola, I suspect make
    About 50 dollars a year per household. Solarcity could
    Make about 5 dollars a month per household. But
    If tesla acquires solarcity, the billions that solarcity makes
    Will not make tesla share price double, since tesla is
    Already overvalued, with a market cap of 30 billion.
    For tesla to be worth that much it has to be making
    500000 cars a year with a 25 percent margin, and
    Growing bigger. But their gigafactory can only
    Produce enough batterries for 500000 cars a year.
    I hope enough solarcity shareholders read this, to
    Reject teslas offer. ..
    The key benefit to leasing rather than owning
    solar panels, is in case of a tornado or hailstorm
    or some kid with a rock and malicious intent
    comes along. So, solar city could always sell the
    panels and offer an insurance policy – which would
    make them a really big insurance company. The
    point being, for shareholders with a long term
    horizon, these shares will do fine – but merged with
    Tesla, not so…. solar city only has a market cap of
    about 2 billion, but will no doubt grow to over a
    hundred billion, seeing they have less than 1% of the
    Potential US market – that means, 99 times more
    revenue is possible. Say 50 times though, only half
    of the potential. Well, in contrast to solar city, for tesla
    to grow 50 times would imply a market cap of 1.5
    trillion – which is highly unlikely since tesla shares are
    already overvalued, and no company has ever passed that mark. Basically I accuse Musk and Reeves of
    conspiring to deprive the shareholders of solar city of
    seeing a 50 times return on their investment.

    Reply
  12. Kelly KitKat
    Kelly KitKat says:

    In corporate mergers, the whole should be greater
    Than the sum of the parts – no such case here. No
    Economies of scale, or of scope are readily apparent.
    This is about musk using overvalued tesla stock to
    acquire undervalued solar city stock. And that would be ok only if the whole was greater than the sum of the parts, but neither business, manufacturing concern, is going to achieve a meaningful jump in profits with such a merger. You have to focus on shareholder (owner) intefest and not consumers. The latter is a problem for
    regulators (politics, not business). To say a one stop
    shop will be created is ridiculous. Two separate webpages still work better. What musk is really attempting to sell americans, is communism. He wants you to believe that all,
    consumers and stockholders (owners) would be
    made better off if all companies merged into one
    giant one stop shop. Is that not what they have in
    places like China, Russia, and North Korea?
    (Also, this merger hurts the consumer by taking away
    choice, in terms of which solar panel company to
    buy from, or which home battery storage company
    to go with.) And owners of solar city common are
    harmed because they will lose a tremendous rise
    in the share price over the next decade, or two, which
    can only happen if the company is not taken over.
    Tesla will not see such a rise in its stock price, whether
    the merger takes place or not, because the stock price
    is already trading at levels as if it was already
    making 18 billion in annual revenues at a
    25 percent profit margin. And because Tesla gave away
    its patents, competition is not far away, which will
    prove disastrous for its share price – consider how
    GM with 100 billion in revenues, its share price is about
    where it was in 1940.
    You really want the government telling you who you must be nice to, live with, work with, etc.? These people who desire a centrally planned economy, hate family.
    Go see the movie, john carter, and note that scene
    where they hand the kids out to be raised by strangers. But the ruling classes, they keep track of bloodlines, and feel only they themselves are entitled to family life, and the rest of humanity is to be as livestock, cattle, slaves.
    Most blacks are destroyed. And many whites too.
    Oil, machinery, should be used to create leisure, and
    Not more excuses to work, or to promote slavery.
    … I wonder if musk's
    Cousin will do right by shareholders of solar city common
    And reject this offer? Imo, Musk's offer puts him in the
    Same boat as bernie madoff (not to be confused with bernie sanders, who is arguably not attempting to steal from "the rich").
    They are robbing shareholders of solarcity common, which shareholders are largely unschooled about finance and economics, and the financial journalists and regulatory bodies such as the sec and doj have abandoned such shareholders
    by permitting the thieves to do what they do. Are they deaf to the law of moses? Or care not for the people being robbed?

    Reply
  13. Kelly KitKat
    Kelly KitKat says:

    This is a bad deal for solar city, the company being acquired. Wherefore are the shareholders of Tesla being permiited to vote on this proposed merger? Musk owns about 20 % of tesla, and about 10 % of solar city, so about 30 % of the 51 % of the votes required for this merger to go through. The only reason I think they are doing this is because they see themselves as being part of the ruling class, see tyranny as inevitable – so did Hitler – and wish to stop other shareholders of solar city from receiving about a 50 times return on their investment if they buy at say 25 dollars a share, over the next 20 years. Solar city can only find so many, say X number of qualified workers to install the panels. They may have reached that number, which means costs will now flatline as revenues continue to rise. Musk and Reeves hope to take those shares away before people realize what great economics this company has. This is keeping with the socialist agenda which president obama supports – making it illegal to have more than a million dollars…. It is not about
    money, as in dollars, for these people, but about money,
    as in slaves. Slavery is their end game. They are eugenicists. Obama – is he black? – he has a korean
    father, does he not?..Irena

    A kid with a rock, and malicious intent… to lease, or to buy… if to buy, then to own… but if to own, then solar city could still sell the owner, insurance, at say 40 dollars a year, which would make solar city like Costco with its annual membership fee, and small razor thin profit margin on sale of goods.

    Reply

    Reply
  14. FirstSea
    FirstSea says:

    Musk is shooting for Tesla becoming the largest company in the world, which could control energy at the consumer level.
    Musk is trying to land a human on Mars by 2024, he plans to commercialize space travel and possibly control the space freight industry.

    Yeah, Elon Musk is trying to take over the world.

    I pledge my allegiance to the our future Overlord and King of Mars.

    Reply

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