Elon Musk Stocks Up On SolarCity Stock
Originally published on Solar Love.
Elon Musk, already the chairman of rooftop solar installer SolarCity and its biggest shareholder, bought $5 million more of the company’s stock on Monday.
Founder, chairman, and major shareholder — as well as the CEO of both Tesla and SpaceX — Elon Musk made use of Monday’s horrible stock market trends to pick up 123,510 shares in SolarCity at $40.49 — a low that has not been surpassed since October, 2013. This purchase, though impressive, only boosts Musk’s holdings in SolarCity by about 0.6%.
Bloomberg Business pointed out that “Musk expanded his position after hedge fund manager Jim Chanos said Friday that he’s short on the company,” which triggered a “rout that drove the shares down 13%.”
SolarCity announced its second quarter earnings late July, and though the company suffered a net loss of $22.4 million, it nevertheless saw record installations and bookings.
GTM Research places SolarCity as the largest rooftop solar developer in the US by far — with 34% of installations, well above its nearest competitors — Vivint Solar has 12%, and Sunrun 10%.
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Here’s the common scenario in our neighborhood: SolarCity reps comes and survey the houses, talked to the owners and offer contracts. Most of SolarCity’s pricing are above the roof, so the other third party installers come and offer the same features and capacity for half the price, sometimes, less than half the price the SolarCity is offering. So these installers are happily following SolarCity all around as they undercut and snatch away the projects.
So SolarCity, wake up! This is not good for Elon Musk that you are still offering insane sky high prices. There is real competition.
If you have read one of the contracts of SolarCity, the sales rep would almost twist your arm to sign the contract, and the fine print require you to snail mail your cancellation to Document Processing Center in Las Vegas and you have three days to cancel your contract. Many fall victim to this deadline and that is the only way they are able to sign up customers, who were negligent to read the fine print. I can post the verbiage of the contract here if you want.
Such high pricing and tight deadlines in the contract could backfire and class action lawsuit looming if they continue such practice. But thanks also to the other solar installers following SolarCity around and snatching their projects, they help the cancel the contract post haste.
Why does SolarCity need to be greedy? Shareholder’s greed?
I’ve been rooting for SolarCity to spearhead the price war of the installed solar PV to have quicker adoption and super massive adoption to save our planet. The quicker the better. Their pricing are a hindrance to the adoption of solar PV.
If Germany can install solar PV at a profit for $1.00/Watt why can’t SolarCity do the same? They are in the position to do so! If they offer their solar PV residential installations at $2/Watt before incentives, America would be transformed overnight.
Sometimes maximum profit per unit time can be attained if you lowered your prices to increase the demand side.
A $0 down solar lease will typically cost the consumer up to 3 times more in the end than the price to purchase the same sized system outright. Don’t believe it? Well it’s simple math. Add up the 20 years worth of lease payment on a typical 4.75kW leased system and let the leasing company take the 30% federal tax credit and you’ll find that the system will cost you about $28,000.
Purchase the same 4.75kW system that will produce up to 600 kWh per month with only 5 hours of peak sunshine per day and apply the 30% federal tax credit and that same system will cost you about $9,600 which is less than 7 cents per kilowatt hour over the 25 year life of the system.
Before signing any long term contract, ask your solar dealer if he or she can offer you a system for less than 7 cents per kilowatt hour. If they can’t, then I suggest that you shop somewhere else.
Sounds like you’re assuming zero interest charges on that purchase. What if I don’t have the cash? What if I have a poor credit rating?
Solarcity and similiar won’t sell to you if you have a poor credit rating.
But….but….I thought Musk was God incarnate? (sarcasm alert) Dishonest business practices, say it isn’t so!
Jim.vis a vis the comments on another related posting today, do you have any thoughts on this? It looks like healthy competition to me! One way to lose money.
Sorry,senior moment, I meant Bob. Apologies, Bob.
I’m not sure what you are referencing re: another posting.
My thoughts on Musk buying more Tesla stock? Very smart, I would assume.
Elon knows all the details. If, in his judgement, Tesla has a very good chance at growing and prospering then buying more stock during a market correction is a wise move.
The market is ran a 10% off sale for a couple of days. Nothing has changed that means that US companies will do 10% worse in the future.
This downward movement, IMO, is only a bit of crowd panic over nothing. But it will be healthy for the market. It will cause people to reexamine investments in overvalued stocks and take a new look for more promising companies.
If I was sitting on a bunch of cash going into the correction I wouldn’t be now. I would have bought more stock a couple days ago.
Tesla, being a more speculative investment than a well-established and slower growing company, is likely to see a larger drop when a correction happens. From August 16 to August 24 Tesla dropped 16%, more than the market. Now it’s up 11% off the bottom.
If Elon bought on the 24th then he’s up 11% on his investment in only 3 days.
I’m short on the leasing,tax swapping, and other creative finance games all that has an expiration date but I think at it’s core Solar city has the fundamentals in market volume and manufacturing that could see it through to the inevitable shift to market where most customers will simple buy their PV arrays with cash our outside financing.
Same here. It has the momentum, as long as it pulls itself out of the nonsense fine.
I wonder if he’s sorry that he bought all that stock now that it has dropped back down to $40.38 as of 1:18 PM EDT?
Time to buy more.
The stock market is having a sweet sale. Get some today and earn a good 10% just on the recovery.
As of now the price is $48.99 close to 20% rise in 3 days. Elon knew!