[quote] stock plunged Wednesday, effectively devaluing the Elon Musk-led company’s currency and casting doubts on its plan to buy SolarCity.
Tesla Motors Inc., the electric car maker, offered Tuesday to buy rooftop solar provider SolarCity Corp., another company that heavily involves Musk, in a stock swap worth $2.8 billion.
But investors sent Tesla stock down as much as 12% when markets opened, although it has rebounded a bit to around $203, or down 7.5%, at 8:40 a.m. Pacific. [/quote]
Not looking good
[url]http://www.latimes.com/business/autos/la-fi-hy-tesla-solarcity-20160622-snap-story.html[/url]
[t]http://imgkk.com/i/p798.png[/t]
these things happen
[quote]“We believe investors are likely to view this transaction as a bailout for [SolarCity] and a distraction to [Tesla’s] own production hurdles,” Rusch said in a note to clients.
“While we remain bulls on the solar industry, we do not view this acquisition as the best and highest use of [Tesla’s] capital and human resources,” Rusch wrote.
Patrick Jobin, an analyst who follows SolarCity for Credit Suisse, said in a note to clients that “we put a low 20-40% probability” of the deal being completed.[/quote]
People going long on TSLA see the acquisition of SolarCity as a negative since SolarCity has been in dire straights. Some see it as Elon bailing out his cousins or trying to cannibalize SolarCity so it dies gracefully. Basically, it's a very high risk investment that comes as a complete surprise when Tesla needs all hands on deck for the Model 3 mass production that's in just two years, and traders are notorious for reacting to anything, so it makes sense a lot of people would jump ship at this news. I hope it goes down more so I can afford some my self for when it inevitably goes back up.
Time to buy.
[QUOTE=.Lain;50568603][t]http://imgkk.com/i/p798.png[/t]
these things happen[/QUOTE]
Looking between jan-march shows that unless this continues for a while there is nothing to worry about.
[QUOTE=OvB;50568656]People going long on TSLA see the acquisition of SolarCity as a negative since SolarCity has been in dire straights. Some see it as Elon bailing out his cousins or trying to cannibalize SolarCity so it dies gracefully. Basically, it's a very high risk investment that comes as a complete surprise when Tesla needs all hands on deck for the Model 3 mass production that's in just two years, and traders are notorious for reacting to anything, so it makes sense a lot of people would jump ship at this news. I hope it goes down more so I can afford some my self for when it inevitably goes back up.[/QUOTE]
Why do we base the entire business world around the buy/sell whims of fickle and panicky idiots again? Stock is such a stupid idea.
[QUOTE=Ragekipz;50568699]Time to buy.[/QUOTE]
One man's time to sell is another man's time to buy
[QUOTE=VinLAURiA;50568731]Why do we base the entire business world around the buy/sell whims of fickle and panicky idiots again? Stock is such a stupid idea.[/QUOTE]
Because its probably the easiest way of generating a large amount of capital. I think the deal makes sense in the long run with Tesla going big on the storage market. A lot easier to push that with solar.
SCTY shares are up though, I might get some.
[QUOTE=VinLAURiA;50568731]Why do we base the entire business world around the buy/sell whims of fickle and panicky idiots again? Stock is such a stupid idea.[/QUOTE]
Stock is simply ownership in a company. If you own 1 share in TSLA you are owner of 1/133,940,000th of Tesla Motors and have an (extremely minor) say in its operations. Selling ownership in the company is a quick way for that company to raise money to operate.
Lets say I am owner of the private corporation [I]OvB's Burger's and Shakes™[/I]. I want to expand my burger joint but don't have the money to do it even though my business is profitable. I can offer an investor 10% (typically a [url=http://dfj.com/content/steve-jurvetson]Venture Capitalist[/url] at this early stage in the game) ownership in my company in exchange for cash to build more Burger joints. The investor gives me money, and I get to build my new stores. In exchange he gets 10% of the value of my business. I now own 90% of it. If my company is valued at $1,000,000 and we liquidate, He would get $100,000 and I would get $900,000.
Now lets say [I]OvB's Burger's and Shakes™[/I] is doing fantastic in my home town, me and my investor are happy and making money. We decide that we want to expand throughout the US. This ambitious project is going to cost many millions that we do not have. My investor doesn't have enough to bankroll it on his own. We can wait and save our profits up until we have enough to do it, or we can go to a Financial Bank and set up our Initial Public Offering where we begin to sell shares of the business to the public on a stock exchange. We'll meet with the bankers and discuss terms for the sale, like how much our stock is to be valued, how many shares we want to sell, etc. We are now a publicly traded Corporation. That's how companies like Tesla raise capital through equity. Companies can also raise capital through debt. Where they issue bonds(which are also bought and sold on bond markets) or take out loans from banks.
Tesla, and [del]most[/del][I]all[/I] big businesses would not exist without it. You cannot build large investments like factories, warehouses, towers, etc without large costs of capital. Especially not starting out.
[editline]22nd June 2016[/editline]
Finance is the art of using other peoples money to build your dreams.
Some guy on Reddit invested his parents retirement fund into SCTY at $50 a share. Maybe his new TSLA shares will make him a decent amount though in the long run. At an exchange rate of 0.122x to 0.131x though the TSLA stock would have to get up to $410 a share for him to break even.
[QUOTE=Ragekipz;50568699]Time to buy.[/QUOTE]
that ship sailed a long time ago
Musk said in the conference call that together with SCTY that TSLA could have a $1 [I]trillion[/I] market cap eventually. At the current amount of shares that would put the TSLA share value at ~$6,843. That's almost double Apples market cap. :v:
[QUOTE=VinLAURiA;50568731]Why do we base the entire business world around the buy/sell whims of fickle and panicky idiots again? Stock is such a stupid idea.[/QUOTE]
Investor confidence around Tesla has been very shaky for quite some time now due to production concerns. While panicky idiots can definitely have an impact on the stock market, there are legitimate concerns as to Tesla's long-term viability, and this acquisition is apparently not helping those concerns. So, it's hardly fair to say that those who are throwing in the towel now are only doing so "on a whim."
I wonder if I could buy a few shares now.
[QUOTE=HumanAbyss;50569090]I wonder if I could buy a few shares now.[/QUOTE]
Not without a significant investment. They are still almost $200/share.
The funny thing is, seeing the stock start to go down usually signals other people who were on the fence to sell too. Since they don't know if it will ever go back up, and the whole point is to sell high to maximize your returns. So seeing the stock start to go down causes more people to sell, which causes more people to sell, which causes more people to sell. Since no one stock trader is the same, one person selling for their own reasons can set off a cascade of others selling off for their own reasons. Eventually it'll bottom out somewhere when the number of hungry investors that couldn't afford old TSLA and now can(like me), outnumber the number of scared investors jumping off, and it goes back up. It's for that reason that socks seem to have a chaotic ebb and flow(assuming the company isn't outright dying). I've read that the best strategy (when dealing with indexes, not individual stocks) is [I]Keep calm and Buy on.[/I]
[QUOTE=OvB;50568871]-stocks 101-[/QUOTE]
This is also why [I]most[/I] Billionaires don't actually have billions in cash laying around. Their Net Worth is determined by the sum of all their assets. If you're a waitress at a diner making min wage and deep in college debt (so your net worth is negative), and you wake up tomorrow to find out your dying uncle signed 100% ownership of his billion dollar retail chain to you in his will, congratulations, You're now a Billionaire. You're still making minimum wage(for now), but your Net Worth has increased however many billions the company was worth.[sp]you still have the debt to pay in your student loans, so you're not truly worth $1B. Your worth is the value of assets-liablities, so in reality you're probably just breaking even [I]hohohohohoho[/I][/sp] Elon Musk is a billionaire because he owns a pretty good chunk of Tesla, SpaceX, and SolarCity. This bad market trend has cost Elon Musk about $700,000,000 overnight, according to Forbes.
[quote]That means Musk’s 23% stake in SolarCity rose $69 million while his 21% Tesla stake lost $773 million in value – a $704 million hit to Musk’s now $11.5 billion net worth. When the stock market closed Tuesday, Musk was worth $12.2 billion, according to Forbes’ Real Time Ranking.[/quote]
[url]http://www.forbes.com/sites/chasewithorn/2016/06/21/elon-musks-fortune-down-700-million-following-teslas-offer-to-buy-solar-city/#64caa25e139d[/url]
Sure, you're a billionaire, but if you wanna buy that mega-yacht you're gonna have to sell something, buddy. (or just hike your salary to extremes like some do)
[QUOTE=OvB;50569122]The funny thing is, seeing the stock start to go down usually signals other people who were on the fence to sell too. Since they don't know if it will ever go back up, and the whole point is to sell high to maximize your returns. So seeing the stock start to go down causes more people to sell, which causes more people to sell, which causes more people to sell. Since no one stock trader is the same, one person selling for their own reasons can set off a cascade of others selling off for their own reasons. Eventually it'll bottom out somewhere when the number of hungry investors that couldn't afford old TSLA and now can(like me), outnumber the number of scared investors jumping off, and it goes back up. It's for that reason that socks seem to have a chaotic ebb and flow(assuming the company isn't outright dying). I've read that the best strategy (when dealing with indexes, not individual stocks) is [I]Keep calm and Buy on.[/I][/QUOTE]
on the other hand, managing a successful portfolio is having the ability to weather out the lows [I]and[/I] the highs. I would say the majority of major stocks are not bought and sold by speculation, a lot of it has to do with big mutual funds either deciding to back off or go further in the market. Sure you have your few million dollar traders, but they're the minority
[QUOTE=Sableye;50569240]on the other hand, managing a successful portfolio is having the ability to weather out the lows [I]and[/I] the highs. I would say the majority of major stocks are not bought and sold by speculation, a lot of it has to do with big mutual funds either deciding to back off or go further in the market. Sure you have your few million dollar traders, but they're the minority[/QUOTE]
Thats a fact, yeah. Would be fun to see who was the biggest seller here, but I can't be ass'd to dig that deep. TBH trading in individual stocks alone is a fools errand unless you're can dedicate 100% of your time to doing research and hunting for good buys. Much better to go with mutuals, indexes, or ETFs and just sit on them.
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