Morning Buzz: Tesla Motors (TSLA), SolarCity (SCTY)

tesla motors

Tesla Motors (TSLA) shares are up more than 1% to $201 in pre-market trading on Tuesday, despite a downgrade at Argus. The firm now rates the automaker a ‘Hold’, down from ‘Buy’, citing the company’s “ill-timed” bid to acquire the beleaguered solar energy company SolarCity (SCTY). Selesky believes the proposed deal adds a new level of risk for Tesla, given the company is still struggling to become profitable. The analyst sees the bid as a potential dilution.

In other Tesla news this morning, SolarCity announced following the close of market yesterday the formation of a special committee of independent directors to evaluate Tesla’s June 20 bid of $26.50 to $28.50. The solar power provider said in a statement that its board of directors “has granted the special committee the exclusive authority to evaluate SolarCity’s long-term business plan and stand-alone opportunities for value creation against a broad range of strategic alternatives…The special committee has retained Skadden, Arps, Slate, Meagher & Flom LLP as its legal counsel and Lazard as its financial advisor to assist in its review.”

America’s #1 solar power provider also said that “it does not intend to comment on or disclose further developments regarding the special committee’s evaluation unless and until it deems further disclosure is appropriate or required.”

Separately, SolarCity was upgraded this morning to ‘Outperform’ from ‘Market Perform’ and added to the Conviction List at Avondale.

SolarCity Corp. recently traded at $22.62, a gain of $0.42 over Monday’s closing price. The name is down 59.51% year-over-year, compared with a 3.03% loss in the S&P 500. SCTY has a current market capitalization of $2.22 billion.

Disclaimer: This page contains affiliate links. If you choose to make a purchase after clicking a link, we may receive a commission at no additional cost to you. Thank you for your support!

Be the first to comment

Leave a Reply

Your email address will not be published.


*

This site uses Akismet to reduce spam. Learn how your comment data is processed.