Actionable news
All posts from Actionable news
Actionable news in SCTY: SolarCity Corporation,

Tesla's SolarCity acquisition continues to divide opinion

Tesla formally announced its $2.6 billion acquisition of SolarCity Monday morning, but it has been discussing the acquisition, and dividing opinions about it, since late June.

And the skepticism over the wisdom of combining the two companies continues.

Speaking Monday on CNBC's "Closing Bell," Oppenheimer analyst Colin Rusch said Tesla and SolarCity would be better off as two separate companies.

"We are very bullish on solar," Rusch said, "but I am not convinced that this is the best use of cash for Tesla."

He added that he thinks "the cash generation off this platform, the leverage, could be 20-25 plus for Tesla," while investors would be "lucky to get high-single digits from a combined company."

Once entirely focused on high-end electric sports cars, Tesla appears to be moving toward a broader product line that would make the company a one-stop-shop for sustainable energy.

Tesla already manufactures battery packs for stationary power storage — the Powerwall is meant for homes, and the much larger PowerPack is meant for commercial or industrial clients. Tesla Chief...