27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
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"We believe it is likely SCTY shareholders approve the transaction, which approaches our fair value estimate and allows for upside participation in the combined company," analyst Michael Morosi wrote in a note.
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Morosi said shareholders of Tesla, who face a more contentious vote, will also vote in favor of the deal, as SolarCity's "360 thousand customer installed base allows for ample cross-sell opportunities of Tesla's new Model 3 and home energy storage applications."
On the other hand, SolarCity would benefit from the Tesla's platform to drive meaningful sales leverage.
"The combined company would be a true end-to-end sustainability-as-a-service provider, bringing a 21st Century automaker and utility into a single offering," Morosi noted.
Morosi maintains his Market Perform rating and $30 price target on SolarCity and believes this transaction has more positive read-throughs than negative for companies levered to distributed solar, such as Vivint Solar Inc (NYSE: VSLR), Solaredge Technologies Inc (NASDAQ: SEDG), Enphase Energy Inc (NASDAQ: ENPH) and SunPower Corporation (NASDAQ: SPWR).
Late Tuesday, Tesla CEO Elon Musk sent an unsolicited acquisition bid to SolarCity CEO Lyndon Rive, valuing the company at $26.50–$28.50/share. At the midpoint of the proposed range, the transaction values SolarCity at $2.7 billion.
At the time of writing, shares of SolarCity were up 6.43 percent to $22.55, while Tesla had slipped 9.27 percent to $199.25 on the day.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.