Tesla (TSLA) Stock: Is The SolarCity (SCTY) Deal A Good Move?

Tesla Motors Inc (NASDAQ: TSLA) | SolarCity Corp (NASDAQ: SCTY)

Tesla Motors is headed up in the market today, and for good reason. Reports are starting to surface that the acquisition of SolarCity is coming soon. Today, we’ll talk about those reports, whether or not the acquisition is a good thing for the companies involved, and what we can expect to see from TSLA moving forward. So, let’s get right to it…

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TSLA Is Getting Very Close To The SCTY Acquisition

For weeks now, we’ve been hearing news about Tesla’s plans to acquire SolarCity. However, today, more news surfaced saying that the electric car maker and the solar company are now very close to a merger agreement. According to recent reports, they are currently in the final stages of due intelligence and a deal can be coming in just a few days.

However, these reports continue to say that it’s possible that the discussions could prove to be unsuccessful. Of course, it is important to set expectations properly. Nonetheless, at this point, by all accounts, it looks like a deal might actually happen.

Is The Acquisition A Strong Move?

The big question revolving around the news is whether or not the acquisition is a good plan for TSLA. After all, there are some issues at SolarCity at the moment. While I believe that the company will do well in the long run, it’s important that the risks are weighed here.

Nonetheless, I do believe that the acquisition would be incredibly good for TSLA. The company has a clear mission to create a cleaner environment – and do it in style. With electric cars, the company has done well and is now increasing production. However, at this point, electric cars are not the big story.

Tesla is working on a master plan to reshape the company. It is expected that a big part of this plan is to reshape the company as an energy company that specializes in utilizing batteries to generate and store power. Adding solar to this mission only makes sense. The implications of the combined companies could be incredible. This is just what Musk meant when he recently said:

The most informed investors are highly supportive of the transaction… [I have] yet to talk to an investor after I have fully explained the situation and not had them support it… Most just didn’t understand how bringing together a car and a solar company made sense from a product standpoint.”

What We Can Expect To See Moving Forward

Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from TSLA. While there have been concerns with the company’s ability to meet production goals, the last month of the previous quarter showed that it is working hard and will likely meet full year guidance in that area. Also, I like the expansion into and transformation to become a leader in the energy industry. This is an incredibly important industry given environmental issues at the moment. I believe that if an acquisition of SCTY could be made, it would position the company incredibly well to become a leader in the clean energy space. All in all, I’m incredibly impressed with TSLA at the moment, and I’m excited to see what comes moving forward.

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What Do You Think?

Where do you think TSLA is headed and why? Join the discussion at TalkTRENDZ!

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