SolarCity (SCTY) Buys Silevo; Stock Soars

 
SolarCity (SCTY) stock rocketed 15% in afternoon trading after the installer of rooftop solar systems said that it had signed a deal to buy solar panel maker Silevo for as much as $350 million, Investor’s Business Daily reported.
 
The announcement was made in a blog post by SolarCity Chairman Elon Musk and other top execs on the company's website. Fremont, California-based Silevo makes photovoltaic solar panels. Musk noted in his blog post that Silevo's solar products "have demonstrated a unique combination of high energy output and low cost."
 
"Our intent is to combine what we believe is fundamentally the best photovoltaic technology with massive economies of scale to achieve a breakthrough in the cost of solar power," Musk wrote. "Although no other acquisitions are currently being contemplated, SolarCity may acquire additional photovoltaics companies as needed to ensure clear technology leadership and we plan to grow internal engineering significantly."
 
SolarCity will pay $200 million in stock for Silevo and up to $150 million more in stock if Silevo meets certain conditions, according to SolarCity's filing with the Securities and Exchange Commission on Tuesday.
 
SCTY was recommended in Timothy Lutts’ “Stocks to Buy and Hold Forever” for Cabot Wealth Advisory. Tim is the Chief Analyst of Cabot Stock of the Month.

 


Stock Picks

Ross Stores

McKesson (MCK) distributes ethical and proprietary drugs, surgical supplies and health and beauty products throughout North America to the healthcare industry. The company also provides technical consulting services to biotech and pharmaceutical manufacturers.

Carnival Cruise Lines

Having just returned from vacation, Tim Lutts is thinking of the millions of baby-boomers who are spending more and more money on leisure travel, particularly on cruises, an industry that is dominated by a few big players.

China Biologic Products

Paul Goodwin advises putting this stock on your watch list.

Cabot Wealth Advisory

Beach Weather in the Market

By Paul Goodwin on July 31, 2015

It’s the beginning of August, high summer in New England, and a bit of summer fatigue is setting in. Summer in New England is short, so we try to pack half a year’s worth of cookouts, beach days, hikes, kayaking, sight-seeing and other outside recreation into three months. It’s fun, but the pace can be a bit frantic, especially as the season enters its third act. Frankly, all I want to do now is lie on a beach somewhere and read a book. Read More >

Managing Your Stock Portfolio to the Market's Tune

By Michael Cintolo on July 30, 2015

In today’s Wealth Advisory, I’m doing something I’ve never done before—reprinting an entire piece I wrote in Cabot Growth Investor last Wednesday. It doesn’t involve any specific stock advice (that is and always will be for subscribers only), but it details the wild divergences in the market (which are now getting lots of press—even the Wall Street Journal had a big write-up on it Monday), what it means, and how I’m advising people to handle it—I think it’s very timely.Read More >

Do Your Stocks Have Borrowing Trouble?

By Nancy Zambell on July 28, 2015

Hostess is making news today as it is issuing $1.23 million in term loans—most of which will go toward paying $905 million in a special dividend to its private shareholders—which I may add, is also more than two times what the buyers paid for this tasty snack business, and triples the company’s debt. According to Bloomberg, these types of deals grew to nearly $16 billion in the second quarter, the highest level in the past 12 months. I’m not making a judgment for or against this action. I just want to make a point that this debt, or leverage recapitalization—spurred by low interest rates—is increasingly becoming a method in which private equity holders get their money back—without selling the business. But it does burden the company with additional debt, which isn’t going to fund company expansion or operations.Read More >