Jun 22, 2016|
Automatically Generated Transcript (may not be 100% accurate)
As the sprawling solar city project at riverbend and some Bobble heads in the final stages of construction. Solar city is biggest single shareholder is making an offer to buy the facility. Lock stock and barrel archer and you're Ilan the owner of Tesla Motors the electric car company has made a bid to buy solar city for two point six billion dollars. They offer came last evening after the markets closed. Solar city plan here is currently being built with a 750 million dollars in state money taxpayer money. Under the current plan New York stable all of the building and all of the research and development equipment inside. I joining us live this morning Tony old gore from all Goran wealth management who has been out watching developments with. A solar city very closely Tony good morning what do you make at this. Good morning Susan and Sharon. There's only one way to look at this. It's a no confidence vote by you Little Rock mosque and future source city. No confidence vote by the markets. Cool hip pink. Missed tackle shop a Tesla you know which is often die this year so. Salute sitting. And I think it spills a real political trouble. For Governor Cuomo in his. I'm doing dollar plan from buffalo so I think it's just so those are all around. Unfortunately. It's it's sort of descended. Well one guy is ready to trade nearly three billion dollars of his own stock to acquire the company. I guess on another just you called a no confidence matter can you explain that. Churchill. Close. Market value market camp. Is about 32 billion dollars in the market. Yes sent it down about 13% so they've lost in excess of four billion dollars. If you're offering two point 64. You know for the shares soared city. Essentially you just lost money Biden deal. Now when you look at solar city. Is business model it. It is just not workable anymore. Currently. They can't. And a operational Utley about two point eight billion dollars that's with a burned shouldn't care. When you look at what test was running on change. The combined companies are going to be burned through about five billion dollars in cash. Now all they ever available in entries here is about one point eight billion hours. So this and it is an extremely risky deal on I think really what my point is as a business person. He's trying to protect his investment as what this company really is viable I'm going to folded into. Tests that they thought the market and that he would do from the air. I looked at the Wall Street Journal this morning Tony and it headline says this deal defies common sense. And MarketWatch says you know this massive conflict of interest issues. In this is well I mean would that alone stop it. But I mean you know again but he via the source street where is going to have to pull out as. You know but again I don't know what options but it elk and here's the interesting thing. When you look at its own city as you know their business plan has. There missed an insult. Solar arrays on your house cost about 30000 dollar stood at you don't get the money up until typically they either yet to issue stock or are yet to issue debt. Now some of the biggest buyers of that there have been Elon Musk the company which is SpaceX and in Tesla. So it truly is incestuous relationship is a matter of fact. The CEO. Alt solid city is mosques first cousin you know their mothers are identical twins. So what where when you look at this. There are symmetric Catholics all over the place. What the point even if you're looking at a combination of the two companies trying to have some strategy. When you look at this sort arena roof it generates about actual lack. Two lots of love. Electricity. We look at the car every query about ten kilowatts. In order charge. So one look at both of them combined with the strategy justice there I just think that the company. Is in severe financial problems and he didn't want to go down and he felt that they cannot afford don't forget. Tesla stock has gone up but I I'm gonna to be thirteen so it's working differently essentially. Elon Musk if we don't go to provable by the company. That doesn't mean that his company would take all or shall surely plant at riverbend off taxpayers' hands would it. No I mean here's an interesting thing there plant is now is that empire state agency. Okay. And unfortunately. They plan because it's owned by stating he didn't generate zero property taxes for the city of buffalo is that generate. Not from an accounting theory. And nothing for New York State so I mean this is given billion barely creep past and even less. The offer of free. Mean addiction operation. You know the company is doing. Don't very very poorly so. You know you have to look at the whole. You know mosque empire and I just think he's doubled balancing and don't forget you know he can roll up your car. Which is going to be an incredibly. Expensive proposition. The one thing he doesn't need is another money losing operation take it to the company's portfolio. And plowed. Tony we're glad you could join us and me and provide so much inside on us we appreciated thanks. Okay Cashmere great get you aid to the Estonian court from Al Gore wealth management.