From Reuters:
The prominent short-seller Jim Chanos, founder of Kynikos Associates, called the proposed merger of Tesla Motors Inc (TSLA.O) and SolarCity Corp (SCTY.O) "crazy," noting that the combined company would need constant access to capital markets.
Chanos
said it would be the "height of folly" for Tesla shareholders to vote
to bail out SolarCity, which he added has an "uneconomic" business
model. He had previously disclosed his bet against the shares of both
companies in the spring.
"A
lot of people aren't paying attention to the actual financial
statements" of the companies and the risks for Tesla, Chanos said at the
CNBC Institutional Investor Delivering Alpha Conference in New York....MORE
Yesterday, "
SolarCity Rises On Project Equity Funding From Soros-Affiliated Outfit" at Investors Business Daily:
SolarCity (SCTY)
stock rose Monday after the No. 1 residential solar installer announced
new project equity funding, though an analyst pointed out that the
company still has a funding gap.
SolarCity said it raised $305 million in a cash equity transaction
from a private investment fund affiliated with Quantum Strategic
Partners and advised by hedge fund Soros Fund Management, which is led
by George Soros. The fund invested in a portfolio of residential,
commercial and industrial solar projects, SolarCity said in its release.
The transaction also included a fully amortizing, 18-year loan that was
syndicated to five institutional investors.
The news "highlights SCTY's ability to raise capital despite the
challenging environment, but with only 64%-71% of the 2016 target
installation financed, we continue to see a funding gap," Needham
analyst Y. Edwin Mok wrote in a research report Monday....MORE
Today both stocks are down with the wider market, TSLA off $3.59 at $194.71; SCTY -$0.89 at $16.91. Chanos is short both but more loudly SolarCity. SCTY was headed to bankruptcy court if Mr. Musk hadn't stepped in with the merger.
