Yesterday's proposed acquisition of SolarCity (NASDAQ:SCTY) by Tesla (NASDAQ:TSLA) was certainly shocking. The question that is on every investor's mind is WHY? Perhaps there is something much bigger going on than just a vertically integrated energy company. The biggest issues have always been what Tesla was; it is clear now they are a modern energy company.
So what is TSLA's play here if they are an energy company? Do they believe that everyone is suddenly going to be switching over to solar power in their homes or offices? Does the storage battery unit solve the age old problem of where do you get your power when it rains? If Tesla is now an energy company, then perhaps we should start thinking about who would be affected. After all, look at how much Tesla has disrupted the auto industry. Five years ago, there were not many, if any, car companies looking to make electric vehicles, now they all want to make them.
My bet is that when the likes of General Electric (NYSE:GE), Honeywell (NYSE:HON) or PSE&G (NYSE:PEG) woke up this morning, they said "uh-oh". After all, it seems like the auto sector is no longer in Elon Musk's crosshairs, it is the traditional power and industrial companies. Could this be far-fetched? Well, yes and no.
