The CEO of the company we were long was the largest shareholder of a struggling little manufacturer he had spun out of our holding some years prior and now wanted to reacquire in a stock-for-stock deal.
The net result would be to increase his percentage ownership of our holding with no positives for us from the combined companies that we could see.
Now the thing to know about fairness opinions in situations where both companies are publicly traded is no matter how gussied up with jargon and analysis they basically come down to the acquirer paying some percentage of the acquiree's stock price over some period of time, often the 90 days prior to the date of the fairness opinion on the deal.
Here's the chart on SCTY from FinViz:
One of the things they teach you in Junior Forensic Analyst school: watch for related party transactions.At the time I hit publish on that post SCTY was at $52.25 down $3.09 on the day.
One of the things they don't teach you, extrapolating this discovery to the logical question: "How important is cost-of-funds to SolarCity's very survival?"...
Just to memorialize the numbers for handy reference, the stock closed yesterday at $21.19 before the news broke. After hours it jumped 15.01% ($3.18) to $24.37