Behind Tesla carnage, signs of support for Musk's SolarCity deal

Some of Tesla Motor Inc's (TSLA.O) biggest investors have signaled support for CEO Elon Musk's plan to buy solar power company SolarCity Corp (SCTY.O), although the electric car maker's stock cratered on Wednesday, lopping more than the $2.8 billion value of the proposed deal off Tesla's market capitalization. “It’s a natural evolution of their mission to transform transportation into a sustainable business,” said Joe Dennison, a portfolio manager of Zevenbergen Capital Investments, which has about 600,000 Tesla shares, or about 0.4 percent of shares outstanding. It is still early in the process, he said, but "We expect it to go through and believe that most investors who actually own the stock understand management's long-term vision for the company."That was not the market's broad reaction, sending Tesla's shares down more than 10 percent, and taking more than $3 billion off its market value, which now stands around $28.7 billion. That was a blow to Musk, who is chief executive of Tesla, chair of SolarCity and the biggest shareholder in both companies. He is also the CEO of rocket-maker SpaceX.He and Tesla management risk being distracted from rolling out the new Model 3 sedan, a mass-market electric vehicle key to the success of the young firm, analysts said, questioning whether merging two companies which both need substantial cash was a good idea.The audacious entrepreneur envisions a one-stop shop for clean-energy fans, who could buy an electric car, home solar system and battery backup in a single visit. Some argued the two firms cater to different groups of customers, with little crossover.Shares of the much smaller SolarCity rose more than 3 percent, valuing the U.S. market leader in residential rooftop solar panels at $2.15 billion.PLANS IN THE PIPELINE In a hastily arranged call with investors and Wall Street analysts early on Wednesday, where Tesla executives defended the deal, Musk said institutional shareholders had some idea of the plan. He had not disclosed the deal, he said, but over the years, "this idea has been bandied about with some of our largest shareholders, institutional shareholders. Yeah, there have been discussions." The manager of the second largest mutual fund investor in Tesla, the $12 billion Fidelity OTC Portfolio, which is also the largest institutional holder of SolarCity, praised a tie-up in comments earlier this year."We remain fans not just of Tesla products, but of the concepts and potential future partnerships behind the company. We foresee fruitful synergies between say, Tesla and SolarCity – or any company that can benefit from superior battery technology," Gavin Baker, who runs the Fidelity OTC fund, said in his first-quarter commentary for investors. It owns 2.1 percent of shares.Overall, 45 percent of Tesla shareholders also hold SolarCity stock, a person familiar with the matter said. Baker and Will Danoff, who runs the $100 billion-plus Fidelity Contrafund (FCNTX.O), the largest mutual fund investor in Tesla with 3.5 percent of stock, have both told Reuters in interviews that they tend to give more leeway to founder-run companies which they believe are still in the early stages of growth. Musk, a founder of Tesla and SolarCity who owns about a fifth of each, will recuse himself from board and shareholder votes, leaving the fate of the deal in the hands of outside investors, led by major fund companies such as Fidelity Investments.Musk himself said that Tesla could be a trillion-dollar company one day, despite its current market value being less than 3 percent of that figure."I have no doubt about this - zero," Musk said on the call with analysts and investors before markets opened on Wednesday. "We should have done it sooner."LOST GOLDEN TOUCH?The quiet support was drowned out by criticism as the stock fell. "This deal feels like (Musk) has lost his Midas touch. I also feel like Musk is trying to do too much," said well-known investor Jeffrey Gundlach, chief executive at DoubleLine Capital, which does not hold Tesla shares.Investors who short Tesla, betting that shares will fall, pointed to the conflict of interest and raised financial concerns about uniting two money-losing companies which both regularly raise cash to support their expansion."When a company's executives misunderstand modern corporate finance and technology strategy, they can make profound miscalculations and errors of judgment," Salome Gvaramia, chief operating officer of Devonshire Capital, which has a short position in Tesla, said in a statement.SolarCity shares have fallen more than 50 percent this year in a highly competitive market, fanning criticism that a Tesla deal was meant to save SolarCity.Some analysts noted that SpaceX has bought SolarCity bonds, giving it and Musk incentive to support SolarCity.Short-seller Jim Chanos of Kynikos Associates blasted Tesla's proposed acquisition of SolarCity, describing it in a statement as a "brazen" bailout" and "shameful example of corporate governance at its worst."Musk said SolarCity would post positive cash flow in the next three to six months and would not have a material impact on Tesla's future cash needs or expectation to be cash-flow positive by year-end. Costs for both companies would go down significantly after the merger, he said, without giving specifics.Share lending data suggested short sellers were increasing their bets against both companies. Interest rates to borrow Tesla shares rose to 5 percent on Wednesday from 1.5 percent early in the day, according to S3 Partners, a financial analytics firm. Hardly any SolarCity shares were available for borrowing. (Additional reporting by Jennifer Ablan, Supantha Mukherjee, Narottam Medhora,Liana Baker, Paul Lienert, Michael Flaherty, Alexandria Sage, Tim McLaughlin, Ross Kerber, Rishika Sadam, Nichola Groom and Noel Randewich; Writing by Peter Henderson; Editing by Anil D'Silva, Lisa Von Ahn and Bill Rigby)

Read more

Facebook investors OK new share class to keep Zuckerberg at helm

Facebook Inc (FB.O) shareholders approved a proposal to create a new class of non-voting shares, a move aimed at letting Chief Executive Officer Mark Zuckerberg give away his wealth without relinquishing control of the social media company he founded.The company's plan to issue two "Class C" shares for each Class A and Class B share held by shareholders, in what is effectively a 3-for-1 stock split, was approved by Facebook shareholders at the company's annual general meeting on Monday.The Class C shares will be publicly traded under a new symbol.Zuckerberg said in December that he intended to put 99 percent of his Facebook shares into a new philanthropy project focusing on human potential and equality. The creation of the Class C shares would allow Zuckerberg to sell the non-voting stock, but keep the voting Class A and Class B shares that would let him retain control of Facebook.Zuckerberg plans on running Facebook "for a very long time", the 32 year-old CEO told shareholders at a Q&A session at the AGM. Shareholders also approved the continued tenure of all the eight board members, including billionaire investor Peter Thiel, who were up for re-election. Facebook announced the plan to create the new class of non-voting shares on April 27. The approval of the plan was virtually certain since Zuckerberg controls the company. (Reporting by Anya George Tharakan in Bengaluru; Editing by Savio D'Souza)

Read more

Scientists use climate, population changes to predict diseases

LONDON British scientists say they have developed a model that can predict outbreaks of zoonotic diseases – those such as Ebola and Zika that jump from animals to humans – based on changes in climate.Describing their model as "a major improvement in our understanding of the spread of diseases from animals to people", the researchers said it could help governments prepare for and respond to disease outbreaks, and to factor in their risk when making policies that might affect the environment."Our model can help decision-makers assess the likely impact (on zoonotic disease) of any interventions or change in national or international government policies, such as the conversion of grasslands to agricultural lands," said Kate Jones, a professor who co-led the study at University College London's genetics, evolution and environment department.The model also has the potential to look at the impact of global change on many diseases at once, she said.Around 60 to 75 percent of emerging infectious diseases are so-called "zoonotic events", where animal diseases jump into people. Bats in particular are known to carry many zoonotic viruses. The Ebola and Zika viruses, now well known, both originated in wild animals, as did many others including Rift Valley fever and Lassa fever that affect thousands already and are predicted to spread with changing environmental factors.Jones' team used the locations of 408 known Lassa fever outbreaks in West Africa between 1967 and 2012 and the changes in land use and crop yields, temperature and rainfall, behavior and access to health care. They also identified the sub-species of the multimammate rat that transmits Lassa virus to humans, to map its location against ecological factors. The model was then developed using this information along with forecasts of climate change, future population density and land-use change."Our approach successfully predicts outbreaks of individual diseases by pairing the changes in the host's distribution as the environment changes with the mechanics of how that disease spreads from animals to people," said David Redding, who co-led the study. "It allows us to calculate how often people are likely to come into contact with disease-carrying animals and their risk of the virus spilling over." The team tested their new model using Lassa fever, a disease that is endemic across West Africa and is caused by a virus passing to people from rats. Like Ebola, Lassa causes hemorrhagic fever and can be fatal. The study, published in the journal Methods in Ecology and Evolution, tested the model with Lassa and found the number of infected people will double to 406,000 by 2070 from some 195,000 due to climate change and a growing human population. (Reporting by Kate Kelland; editing by Andrew Roche)

Read more

Save the last dance for me: Being cute not enough for this spider when choosing a mate

SYDNEY A Sydney scientist has discovered seven new species of the tiny Australian peacock spider - a spectacularly colored, three-millimetre arachnid that dances to attract a female mate.Jurgen Otto, with the help of colleague David Knowles, made the two latest discoveries of the miniature creatures while looking for other spiders in Western Australia in November and had all seven named in the scientific journal Peckhamia last month. "They are very, very colorful, they often have iridescent scales and they do something quite remarkable. They perform a courtship dance for females, to impress them," Otto told Reuters TV on Monday.While footage of the dances is proving popular online, some female peacock spiders end up eating the colorful males if they are not impressed by the courtship. The discovery of the new spiders means there are now 48 known species, found mostly in southern Australia and which range in size from three to five millimeters. Juveniles measure just half-a-millimetre.The Sydney scientist, who studies mites during the day, developed a passion for the tiny spiders in 2005 after discovering an arachnid on a photograph he took following a bushwalk in Ku-ring-gai Chase National Park, New South Wales. Otto said the dancing spiders, who offer no threat to humans, were even proving popular with arachnophobes."They are harmless, they are cute, they are colorful, they remind people of their own cat. I often compare them with kittens with too many legs, so really people get excited when they see them," he said. "People who hate spiders confess that they actually can't help loving these ones and in time this will just change the opinions people have of spiders, I hope." (Reporting by Stefica Nicol Bikes. Writing by Patrick Johnston in Singapore. Editing by Nick Macfie)

Read more

Securely Connect to Cloudant Service From Node.JS With IBM Bluemix

IBM Cloudant is a NoSQL JSON document store that’s optimized for handling heavy workloads of concurrent reads and writes in the cloud—a workload that is typical of large, fast-growing web and mobile apps. You can use Cloudant as a fully-managed DBaaS running on public cloud platforms like IBM SoftLayer or via an on-premise version called Cloudant Local, that you can run yourself on any private, public, or hybrid cloud platform you choose.Securely connecting to your Cloudant DB is the first and most important thing for any CRUD (Create, Read, Update, Delete) operation to take place. Securely?! Yes, there's always a chance that one of us may store our DB credentials in a file like .env and push it to a public repo. To avoid this credential exposure which may cause unwanted consequences, VCAP_SERVICES environment variable, a JSON Object is introduced to safeguard the information which includes service instance name, credential, and connection URL to the service instance.Node.JS + Cloudant Boilerplate AppLet's create a Node.js boilerplate application which talks to Cloudant DB for data. If you don't own a Bluemix account yet, Create one at https://bluemix.netClick on CATALOG from the top bar (Classic Experience)Navigate to "Boilerplates" under Starters on the left pane.Select "Node.JS Cloudant DB Web starter".Now, you should see a page with an option on the right pane to enter a name for your application.Enter a name of your choice and click create.Congratulations! You have successfully created a Node.JS application with Cloudant service running at: HTTP://.bluemix.netStarter CodeOn the success page, scroll down a bit  and click on the "DOWNLOAD STARTER CODE" button to download your starter code.Open the code in any IDE of your choice. I will be using brackets as an IDE here.Navigate to the heart of the application which is app.js file and as you walk through the code you should see this:The starter code provides you a sample Favorites Organizer application with Cloudant CRUD code snippets.To see the VCAP_SERVICES Cloudant JSON, navigate to your application under DASHBOARD and click on Environment Variables on the left pane. You should see the below JSON with your credentials and URL,{ "cloudantNoSQLDB": [ { "name": "CloudantNodeJSApp-cloudantNoSQLDB", "label": "cloudantNoSQLDB", "plan": "Shared", "credentials": { "username": "", "password": "", "host": "", "port": 443, "url": "" } } ] }Quick video showing you what we've achieved so far:Connect to your Cloudant service from NodeJS. Securely on IBM Bluemix from Vidyasagar MSC on Vimeo.Using Node.JS RuntimeIf you don't want to use a boilerplate starter code and are looking to start from scratch, you can achieve the above scenario using Node.JS runtime.Navigate to CATALOG and on the left pane click on Runtimes under Compute.Select "SDK for Node.JS" and give it a name.Once the runtime is successfully created, click on Overview in the left pane and you should see an option to add a new service or bind an existing service.Click on "Add a new service or API" and select Cloudant service under Data & Analytics on the left pane.Quick video showing you how to create a Node.JS runtime with Cloudant service:Node.JS Runtime with Cloudant Service on IBM Bluemix from Vidyasagar MSC on Vimeo.If you observe, you won't find VCAP_Services in the app.js file. Add the below code snippet just before the last closing brace of app.js.if (process.env.VCAP_SERVICES) { // Running on Bluemix. Parse the port and host that we've been assigned. var env = JSON.parse(process.env.VCAP_SERVICES); var host = process.env.VCAP_APP_HOST; var port = process.env.VCAP_APP_PORT; // Also parse Cloudant settings. var credentials = env['cloudantNoSQLDB'][0]['credentials']; username = credentials.username; password = credentials.password; }There are two key things to be aware of  while using VCAP_SERVICES at this point...When running or testing locally, VCAP_SERVICES won't be available so your Node.JS app will return an error. One way to resolve this is to push your code to GIT and deploy the code as and when there are critical updates or changes to the code.The value of the VCAP_SERVICES environment variable is available only when you bind a service instance to your application.This means that it's not available when you create a Cloudant service alone. It should be bound to an application.My next blog post will be on how to run your Node.JS Cloudant app locally for testing. Stay Tuned!

Read more
Older Post