Why Alphabet, Sunoco, SolarCity, and More Are Trending

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Sunoco Logistics Partners L.P. (NYSE:SXL) shares are 6% in the red today after the company announced that it has agreed to buy Vitol’s Permian integrated crude oil business for around $760 million plus working capital. The acquisition provides Sunoco Logistics with a crude oil terminal of about 2 million barrels as well as a crude oil gathering and mainline pipeline system in the Midland Basin, in addition to crude oil inventories related to Vitol’s crude oil purchasing and marketing business. In connection with the acquisition, Energy Transfer Partners and Energy Transfer Equity, the two general partners, have agreed to reduce the incentive distribution the general partner receives by $60 million over two years. To finance the acquisition, Sunoco Logistics has announced the public offering of 21 million common units in addition to granting underwriters a 30-day option to buy an addition 3.15 million common units. Jim Simons‘ Renaissance Technologies upped its stake in Sunoco Logistics Partners L.P. (NYSE:SXL) by 57% in the second quarter to 727,600 shares at the end of June.

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Although some in the market don’t think Tesla Motors Inc (NASDAQ:TSLA)’s merger with SolarCity Corp (NASDAQ:SCTY) will succeed, Baird analysts Tyler Frank and Ben Kallo respectfully disagree, saying, “we estimate there is an ~80% probability the merger occurs given conversations with Tesla shareholders… We previously noted SolarCity shares are trading below the value being offered by Tesla, and believe this offers a short-term trading opportunity.” Specifically, seeing as SolarCity shareholders are expected to receive 0.11 Tesla shares for each share of SolarCity they own, SolarCity would be trading at around $22-to-$23 at current Tesla prices, rather than at its current $20 mark, should the merger go through. 26 funds in our database owned shares of SolarCity Corp (NASDAQ:SCTY) at the end of June, up by three funds quarter-over-quarter.

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Disclosure: None

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