Shares of Tesla Motors were broadly higher during the course of Monday’s session despite four shareholders in Delaware have filed charges against the company’s planned acquisition of renewable energy company SolarCity.
Due to the lawsuits, the $2.6 billion deal could be delayed, Tesla said.
The company’s stocks slipped close to 11 percent amid the period of skepticism that the shareholders could intervene the deal.
It remained steady at $205.17 on Monday, while SolarCity shares were also dragged down at $17.19.
Further, it has been dealing with its dilemmas on its own, given that the company currently faces a serious cash crunch and has been aiming at increasing additional money this year in order to add production funds for its new Model 3 sedan, as well as build out a giant battery factory.
According to Tesla, the SolarCity acquisition could be supported by the funds they’re raising.
Subsequently, it seemed that shareholders claimed that both companies’ board members have loosened their fiduciary duties relative to the merger, according to the Security and Exchange Commission (SEC) filing.
Tesla CA-based is expecting the deal with SolarCity to be completed by the year-end, citing that the electric car manufacturer aimed at transforming the car company into a clean energy firm with the SolarCity merger.
SolarCity Stocks Inched Lower
Brokerage firms have issued rating on the company’s stock to “risk-adjusted” total return prospect over an investment horizon annually, marking a “sell” ratings with a score of D+.
In essence, the company’s weaknesses can be seen in its declining net income, along with its generally unacceptable historical performance in the stock itself and a disappointing growth in its earnings per share (EPS).
The chart below illustrates TSLA stock’s movement before the proposed acquisition of SolarCity, in which it is very clear that stock prices were seen rallying in a log term basis from late June until late July.
On June 29, shares of Tesla were expected to make an all-time highs after the company has announced its acquisition plans with the SolarCity, in which it has become the word-of-mouth of investors and had generated higher discussions, considering some didn’t buy with the proposed acquisition.
Investors were enthusiast to call for a buy on this stock for several sessions. However, the soaring shares of the company were put to an end after Tesla’s Gigafactory has only been partially opened, which was all over the world that the grand opening of its Nevada battery plant is on July 29th.
However, is seems that there were already multiple publications when in fact, Tesla has only sent invites to certain VIPs, which has sent its shares to a significant drop.
Given that stock prices has seen a significant decline after their failed grand opening of the Gigafactory, it is likely that stocks begun to recover as three consecutive sessions were seen on the green and in a bullish trend.
As shown in the chart above, the stock’s price tried to break out on the upside on September 16, it could however be a false breakout as the next two succeeding shares were seen dropping and nearly touching resistance 203.64.
Thus, if the next candle would show another drop without touching the resistance, it is considered as a downward trend.
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