SolarCity (SCTY) Equity Financing Should Provide Confidence to Tesla (TSLA) Shareholders - Baird
- Top 10 News for 12/2: Crude Rips on OPEC Cut; Starbucks' Schultz Steps Down; Nonfarm Payrolls Flat in Nov.
- Unemployment Rate Drops to 4.6%
- Bond yields slip on U.S. jobs data, euro steady before Italy vote
- Alibaba (BABA) Founder Jack Ma Discuss Plans to Retire; 'I Don't Want to Die at the Office'
- Starbucks Coffee (SBUX) CEO Howard Schultz to Step Down, Appointed Executive Chairman; Kevin Johnson New CEO
Find out which companies are about to raise their dividend well before the news hits the Street with StreetInsider.com's Dividend Insider Elite. Sign-up for a FREE trial here.
Baird analyst Ben Kallo weighed in on SolarCity (NASDAQ: SCTY) after the company announced it raised $305M in cash equity financing. Effectively, the company monetized a portion of the future cash flows from a 230 MW portfolio. The transaction also includes an 18-year loan that was syndicated to 5 institutional investors.
Kallo said, "Importantly, this is the second time SolarCity has monetized cash flows in recent months and we estimate the company has achieved a lower rate."
The analyst said the transaction should provide confidence to Tesla (NASDAQ: TSLA) shareholders that SCTY can be self-funding over the long term.
"While the TSLA transaction still is outstanding, this should help ease TSLA shareholders' concerns regarding SCTY's cash needs when/if the transaction closes," Kallo said. "Under the proposed merger SCTY shareholders would receive 0.11 TSLA shares per SCTY share (equivalent to ~$22 based on TSLA’s current price.)"
The analyst maintained a Neutral rating and price target of $25 on SCTY.
Shares of SolarCity closed at $16.77 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Pandora (P) Advisers Said to Begin Reaching Out to Possible Suitors Following Approach from Sirius (SIRI) - Bloomberg
- Drexel Hamilton Raises Price Target on Workday (WDAY) Following 3Q Beat
- UPDATE: Johnson & Johnson (JNJ) Talks with Actelion Said to Progress After New Offer North of $250/Share - Bloomberg
Create E-mail Alert Related CategoriesAnalyst Comments
Related EntitiesRobert W Baird, Tesla, Definitive Agreement, Ben Kallo
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!