Tesla/Solarcity merger

askme
askme

So, the vote is going to happen next Monday. As far as I know, if it goes through, solarcity shares will be converted to tesla shares at a .11 ratio. That basically means that, using today's SP value, you can buy tesla shares at a discounted price of 153.54 once the merger goes through, and it'll turn into 196.41. That's about a 28% increase.

If it does not go through, solarcity will crash hard, probably around 15-20%.

Elon Musk said that he's very confident that the deal will go through and predicts that it'll pass with a super majority (2/3s of the vote).

What does Veeky Forums think about this deal? I'm pretty tempted to jump in.

Supergrass
Supergrass

Fuck me never knew solarcity was on the exchange.

So what happens if you buy solar city stock and they merge?

Bidwell
Bidwell

@Supergrass
You lose all your money

idontknow
idontknow

@askme
The deal probably won't go through because Tesla investors don't want it. Tesla already has 'revenue problems' Solar City is another one of Musk's failing ventures. I see what he's trying to do. he's trying to consolidate all of his debt into Tesla so he can hope to save the other ventures like Space-X and Solar City which still have a hope of survival. Tesla investors just won't go for it though. At 240 a share that would tank Tesla to a possibly unrecoverable level.

Gigastrength
Gigastrength

@idontknow
Nah

PackManBrainlure
PackManBrainlure

@askme

On one hand Tesla investors are gullible idiots that bought a VIP seat on the hype train.

On the other hand i want to say that people with money can't be that stupid.

Put 1-5% of your portfolio into $SCTY, people are dumb and think Musk is some kind of god.

eGremlin
eGremlin

@Supergrass

Like I said in the OP, 153.54 dollars worth of solarcity stock turns into 196.41 dollars worth of tesla stock, giving you a 28% gain. It's pretty huge on something Musk is very confident about.

@idontknow

Musk says he's not going to vote on the tesla side due to conflict of interest, but the majority of shares are held by large institutions and he claims that they're over board for it.

Like I said in the OP, he says he's very confident it'll go through and he predicts a 2/3 super majority will vote in favor of it.

@PackManBrainlure

I wager very few people think he's some kind of god. He is, however, the only person ever to own two separate billion dollar companies, which should go far, as far as creds go.

VisualMaster
VisualMaster

@eGremlin

are you retarded? it's trading a discount to that price because everyone thinks it is not going to pass.

w8t4u
w8t4u

Fuck it

DeathDog
DeathDog

@askme
I might have to try this play, I'll just use a tight stop loss and see how it unfolds

BunnyJinx
BunnyJinx

@DeathDog
Just bought 150 shares, I've been meaning to get into tesla for awhile so this could be a good entry point.

Soft_member
Soft_member

@eGremlin
Like I said in the OP, 153.54 dollars worth of solarcity stock turns into 196.41 dollars worth of tesla stock, giving you a 28% gain.
unless the merger plummets tesla price as it should then you can actually lose.

Deadlyinx
Deadlyinx

@idontknow
Tesla investors are retarded so this is going through.

BlogWobbles
BlogWobbles

@Soft_member
As /biz/s favorite last words, it should already be priced in

Soft_member
Soft_member

For those who want to jump in remember a few things

Tesla is soon going to make a big stock offering to pay down debt/fund current operations, which will send the stock down before you can ever sell.

If the merger doesn't go through the company is doomed and you will lose it all! If you win we are talking a 17% gain as of current prices, less the offering. Let's call that 5%. So you are risking it all for a 12% gain!

StrangeWizard
StrangeWizard

@BlogWobbles
nothing is priced in a 100% until it's a 100% my man

kizzmybutt
kizzmybutt

@w8t4u
Wow! A whole 477 dollaroos!

RumChicken
RumChicken

@kizzmybutt
I'm sorry I'm poor

Flameblow
Flameblow

@RumChicken
it's cool, we all gotta start somewhere. The other user is an asshole.

I recently turned ~1500$ into ~3000$ with Canadian we'd stocks... Small beginnings!

eGremlin
eGremlin

Stock is down, luckily I haven't invested. Going to keep my eye on this

SomethingNew
SomethingNew

Hypothetically could someone wait until the announcement then if it comes back good toss all the money into solarcity at the last second and get the returns without the risk of not knowing?

GoogleCat
GoogleCat

@SomethingNew

If that's even allowed, I'm sure it'll shoot up before you're able to buy in. Computers are much faster than human clicks.

Anyways, I bought in, but not that much. 300 went in, hopefully I get around 400 out of it.

I'd like to keep this thread around until Monday, so we can either cry or celebrate together.

5mileys
5mileys

@GoogleCat
Yes let's keep this thread alive. If tesla pans out the way Elon hopes, then Monday will be a very monumental day

WebTool
WebTool

@askme
153.54
Neither Tesla nor Solarcity is trading at that price right now.

GoogleCat
GoogleCat

@WebTool
What he is saying is that since scty will be bought at a premium relative to its current price, it's like you get a chance to buy Tesla at a discount.

Currently Tesla is trading at 205. At .11 scty shares to Tesla, that puts scty buyout at 22.50 or a 28% increase over its current price of 17.50. that's like buying Tesla at 160

whereismyname
whereismyname

I think you guys are underplaying the downside of scty a little bit. If this doesn't go through, it's bankrupt within a month basically. Not looking at 15-20% drop here, possibly 50+%

Need_TLC
Need_TLC

@Soft_member
unless the merger plummets tesla price as it should
this, maybe not "plummeting" but there'd be a correction for sure.

@BlogWobbles
it should already be priced in
no. the fact that right now arbitrage is possible shows there's nothing fully priced in. if everything were priced in this thread would be pointless.

solarcity performs worse than tesla. now solarcity is to become part of tesla. of course it'll drag down tesla a bit. not saying you won't end up with a profit (a risk premium for betting on the merger happening), but it won't be a full 28%.

Boy_vs_Girl
Boy_vs_Girl

@whereismyname
You can call me insane or optimistic, but I see Elon musk as the next Steve Jobs. I know this is very risky, but there is no way this man is going to be doing so much and I'm not going to be a part of it. If i lose my money, this will be an trade I can live with, since I believe so heavily in the company.

farquit
farquit

@Boy_vs_Girl
Pretty sure the money from your loss will go to investors and not the company.

Poker_Star
Poker_Star

@farquit
I'm wholly unconcerned with who that money goes to. I expect to make a profit from Tesla, if I don't I lost my money to a venture that I believe could change our current society.

Soft_member
Soft_member

@Poker_Star
Then just donate money to the company directly.

Lord_Tryzalot
Lord_Tryzalot

Sorry I'm new to the market

If I buy SCTY stocks today and the trade goes through on Monday will I be buying at the stock price today or the price it will be on Monday.

Soft_member
Soft_member

@askme
Elon Musk said that he's very confident that the deal will go through and predicts that it'll pass with a super majority
Please don't listen to this man.

idontknow
idontknow

@Lord_Tryzalot
as far as i know, if you order now you will buy at previous close price

Deadlyinx
Deadlyinx

Retard new to Veeky Forums and stocks here

So you're saying if I buy these stocks now and sell them on Monday I can forget my middle class life?

Flameblow
Flameblow

@Deadlyinx
Not at all. If you drop $100,000 into it today and the merger goes through you make $28,000.

If you only drop $500 you make $140. Stocks are not there to get you rich, that's business and career. Stocks are there to fight/beat inflation.

SniperWish
SniperWish

@Flameblow

But don't people actually live off of stock trading? I'm sorry I'm really fucking stupid.

PurpleCharger
PurpleCharger

@SniperWish
Everyone who does that at a young age has money from their parents. They trade a portfolio of 500k or more and live off the proceeds without worrying about the risks. Plus their parents pay their rent so they don't have to worry about not making anything that month. Anyone else doing it is 45+ and using their life savings to take advantage of insider knowledge accumulated from a network forged over 25 years of work in the industry. So in essence and for all intents and purposes:

Stock traders aren't real.

GoogleCat
GoogleCat

@PurpleCharger
what are day traders

Soft_member
Soft_member

@GoogleCat
He answered that in the first sentence of the post you're responding to.
Everyone who does that at a young age has money from their parents.
Anyone else doing it is 45+ and using their life savings to take advantage of insider knowledge accumulated from a network forged over 25 years of work in the industry.

iluvmen
iluvmen

@Flameblow
There's is hope

Poker_Star
Poker_Star

@Flameblow

But I want to be rich

JunkTop
JunkTop

Tomorrow's the day!

PurpleCharger
PurpleCharger

Really thinking about throwing some yolo money at this. Since I have no SCTY shares right now, what happens to the amount not converted at 9 to 1, cash payout? And what is the timeline for receiving the Tesla shares?

Burnblaze
Burnblaze

@PurpleCharger

Cash payout. And I'm not sure on the timeline. All I know is that the vote is tomorrow, supposedly. Don't know what time though. Tomorrow should be hectic.

SniperGod
SniperGod

@Poker_Star
posting on Veeky Forums
not knowing that only new tender offers raise money for companies

TreeEater
TreeEater

@SniperGod
Are you incapable of understanding a single sentence? If English is your second language then please forgive me. I buy companies I believe in and understand, therefore if I lose money I can rationalize it differently than if I were speculating on a random stock. Good lord

TechHater
TechHater

OP Here

Sorry, I dun goofed. The vote didn't happen today, nor do we know when the actual vote will take place As someone else put it

An expected RECORD date was announced to be "some time during" the week of the 19th. If you hold the shares on the record date, you are allowed to vote (at a later date).

Going to let this thread die, since I don't know when the vote will happen.

I may throw some more money into scty soon. TSLA went up the last 4 days in a row, so its likely in the middle of recovering. SCTY seems to be standing still though; the gap difference between the two went from 28% last Friday to 31% today, so that's something I'll have to keep in mind.

StrangeWizard
StrangeWizard

@eGremlin
Keep in mind Musk was not very confident about SpaceX and was very confident about his second wife. The man's a genius, but he's not infallible.

Snarelure
Snarelure

@askme
Dude the vote already went through. The majority voted in favor of the Solar City merger. We are looking at a 20-25% merger arbitrage opprotunity here. The only risk now is if they back down from the deal because of Solar City's debt OR Solar City goes completely belly-up. I've got 28 shares of Solar City ($490), and when they are converted I'm willing to hold onto those TSLA shares for the long term.

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