Tesla's Acquisition Of Solar City Would Be 'Groundbreaking'
Tesla Motors Inc (NASDAQ: TSLA) announced a proposed deal to acquire SolarCity Corp (NASDAQ: SCTY) that valued the company somewhere between $26.50 to $28.50 per share. In a call with Benzinga, Global Equities analyst Trip Chowdhry lauded Tesla on what he believed was a "groundbreaking" deal.
Specifically, Tesla was able to send "inefficient utility companies back to the writing board" with the potential SolarCity deal. Chowdhry harped on the potential of a Tesla-SolarCity combination as a utility play, which would help eliminate surge pricing during peak hours.
As for the perception of the deal, Chowdhry believed auto and utility analysts would think the deal is "crazy." However, he highlighted investors and analysts need to have a holistic view of both Tesla and SolarCity, and that this would be a powerful acquisition if it goes through.
As for the utility sector, Chowdhry didn't hold back, saying the sector may be "having its Nokia, Blackberry moment."
Shares continued to fall in Tuesday after hours, down 13 percent at $191. SolarCity was up 18.45 percent at $25.10.
Latest Ratings for SCTY
|Oct 2016||Axiom Capital||Upgrades||Sell||Hold|
|Aug 2016||Raymond James||Downgrades||Strong Buy||Market Perform|
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