SolarCity Raises $305 Million, but There’s a Catch

There are a couple of implications from the new financing announcement. One is that SolarCity’s funding costs are getting higher over time, meaning it’s generating less value for investors. Another is that it’s selling most of the cash flows it will get from customers, meaning there’s less and less upside potential in the future.

The flip side is that SolarCity has been able to get funding for its projects, keeping the company’s operations afloat for now. That’s a positive as SolarCity attempts to be bought out by Tesla Motors and transitions its business from financing leases and power purchase agreements to selling solar systems to customers with third-party financed loans.

The final point may be most important for those looking at the company today. If SolarCity can transition to cash sales or loans, it will generate up-front cash, lessening its reliance on financing transactions. If that’s the case, today’s rising financing costs won’t matter nearly as much as they would otherwise. But that’s a lot for a company like SolarCity to juggle, especially in the middle of a buyout process.

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2 Reasons SolarCity May Be Headed for a Power Failure

“SolarCity is in dire need of cash. It’s already gotten two bridge loans from Tesla and it needs this deal to go through,” said Gordon Johnson, an Axiom senior analyst, told Real Money this week. Axiom, in its June 28 report on SolarCity, estimated the company wasquickly burning through its cash and would likely fall to near zero, or $1.4 million, by the fourth quarter. As a result, some Wall Street watchers have been whispering the “bankruptcy” word as it relates to SolarCity.

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Goldman Sachs Plays A Rotten Role In Tesla-SolarCity Deal

Summary

  • You’ve not met Aswath Damodaran? Allow me to introduce you.
  • Damodaran lays bare the many follies & misdeeds behind the TSLA-SCTY fairness opinions.
  • In the Tesla fairness opinion kitchen, Goldman Sachs wrote the recipe, furnished the ingredients, and supplied the spoon; Evercore and Lazard merely stirred the pot.
  • Goldman Sachs has been consistently wrong in forecasting Tesla performance, and (very quietly) already has slashed the 2017 revenue forecast it gave Evercore and Lazard.
  • Ben Kallo stops by with an important reminder for us all.

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This shows why Tesla-SolarCity is a ‘crazy’ merger, Jim Chanos says

Jim Chanos called Tesla Motors’ proposed merger with SolarCity”crazy” and “the height of folly” while outlining his short positions in the stocks on Tuesday.

The short-seller from Kynikos Associates estimated the combined company would burn through $1 billion per quarter and “constantly need access to capital markets.” He described SolarCity’s business model as “just plain uneconomic.”

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Tesla’s New Lease Financing Disclosure: Who Writes This Stuff?

Beyond the minimal short-term effect of the new announced financing agreement, the fact that Tesla continues to choose every way possible to “spin” its narrative in a dissembling way is another red flag for Tesla investors. The Deutsche Bank financing agreement is just a drop in the bucket of all of the capital that Tesla will need over the next three years but the company just couldn’t resist suggesting otherwise. What’s amazing to me is that there is also not a lot more scrutiny about Tesla’s claims that its May 2016 financing was supposed to be all the capital needed to support “full production” of the Model 3 and to complete any additional investment needed for the Gigafactory.

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Tesla Shareholder Sues … DON’T BURN OUR MONEY TO SAVE YOUR CRAPPY SOLAR CO.

Elon Musk‘s trying to save his legacy off the backs of Tesla shareholders … so claims a Tesla shareholder who’s suing the icon.

The shareholder claims Elon’s move to infuse his failing SolarCity with $2.6 billion of Tesla stock is outrageous, self-involved and irresponsible.

According to the docs … Elon’s trying to run Tesla like a privately held company, moving money around not because it’s right for the car company but to build his own legacy of changing the world.

The lawsuit claims Elon doesn’t have his eye on the ball … that Tesla itself is operating in the red, burning cash, and he should focus on building electric cars. The stockholder calls Elon’s obsession with SolarCity “a dangerous distraction.”

The shareholder says SolarCity is a stinker … the company went on the auction block recently and didn’t attract a single bidder.

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How Elon Musk Used A Broken Marketplace To Play Us All

Elon Musk has controlling stakes in 3 companies: Tesla, SolarCity, and SpaceX. Tesla and SolarCity are publicly traded. SpaceX is not publicly traded. This document’s focus will be soley on the financial interdependencies of the companies. There are also incestuous business practices, and nepotism within the leadership of each company Musk controls.

We hope to illustrate simply and clearly the immense risk the  US government has taken with your money by giving it to a man who is essentially telling them what they want to hear while picking their pockets doing it.

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