Here’s Why These Stocks Are Trending Today

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Chanos Comments on Propsed Tesla/SolarCity Merger

It’s well known that short-seller Jim Chanos of Kynikos Associates isn’t a big fan of Tesla Motors Inc (NASDAQ:TSLA) and SolarCity Corp (NASDAQ:SCTY). Chanos didn’t change his views after a merger between the two was proposed, telling CNBC that the merger represents “a shameful example of corporate governance at its worst. SolarCity, whose bonds were yielding 20 percent yesterday, is a company headed toward financial distress. It is burning hundreds of millions in cash every quarter, a burden that now Tesla shareholders will have to bear, at a total cost of over $8 billion”.

Former Tesla bull and Morgan Stanley analyst Adam Jonas also curbed his enthusiasm over the deal, with the analyst recently downgrading Tesla to ‘Equal Weight’ from ‘Overweight’. Jonas thinks the merger’s risks outweigh the positives.  The number of funds tracked by us with holdings in Tesla Motors Inc (NASDAQ:TSLA) rose by 10 quarter-over-quarter to 39 at the end of March while 23 top funds had a long position in SolarCity Corp (NASDAQ:SCTY), down by six funds from the previous quarter.

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Canadian Pacific Rises on Analyst Upgrade

Canadian Pacific Railway Limited (USA) (NYSE:CP)’s shares are almost 2% higher after analysts at Raymond James upgraded the stock to ‘Strong Buy’ from ‘Outperform’, noting that the railroad’s valuation might provide a solid entry point for investors holding for the long term. Canadian Pacific shares are up 2% year-to-date and trade at just 13.5 times forward earnings estimates. A total of 36 funds from our database own shares of Canadian Pacific Railway Limited (USA) (NYSE:CP) as of the end of March.

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