SolarCity Corp (fka SCTY)

[MaxStock888]

SCTY is way overvalued compare to SUNE. Pair Trade Idea
A good trade in my view would be to do a pair trade of going long SunEdison and short SolarCity. I think that SCTY is highly overvalued compared to SunEdison. SunEdison is going to construct and sell 350 MW of solar projects in 2013, while SolarCity is going to do somewhere around 250 MW. However, SCTY's market value is roughly 1.5 times that of SunEdison. (SCTY market value is $3 billion compared to $2 billion for SunEdison) SunEdison also has a big semiconductor wafer business whose value should at least be $1 billion in my view. SunEdison's solar energy business alone is bigger than SolarCity's entire business. If you add SunEdison's billion dollar semi wafer business, the valuation discrepancy becomes even larger. I would strongly advise investors to short SCTY at $40 and go long on SunEdison at $8.5