The $400 Million Mistake at Lazard: Solarcity "Undervalued" in Tesla Purchase
This was a juicy little story that came out today...apparently someone double-counted some projected indebtedness for SolarCity which dropped the projected valuation range by $400m. That comes out to right around 15% of the $2.6Bn deal...which made me pause for a minute and think...
While Lazard is known for their amazing analysts and the prestige oozing out of the bullpen, it just goes to show you that 100+ hour weeks might lead to a few mistakes...do you hear that VPs/Associates/MDs at Lazard? DON'T BLAME THE ANALYST or the WSO Monkey Army will be called upon.
How many Model Ss can $400 million buy? Quick math = 5,000...only about 10% of current annual production.
Nothing to see here, moving along.
...so do you guys think something else more nefarious is going on here? Did the SolarCity shareholders just get bent over by Musk?
Definitely can't blame the Analysts here as someone should have caught it. At the same time though, someone has to get their head cut off for this, this makes the senior people look like complete morons.
Tesla and SolarCity Merger (relationship between purchase price and EV) (Originally Posted: 08/28/2016)
Hi all, I was reading up on SolarCity and Tesla deal in which Tesla decided to purchase SolarCity for 2.6 billion dollars. However, EV of SolarCity is about 8 billion dollars (liabilities about 6 billion dollars). I thought you were supposed to take in the liabilities as well when you acquire a company. Can someone explain what is going on here? It was a all stock deal if that helps.
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