NEW YORK (TheStreet) -- Shares of SolarCity (SCTY) closed up on Monday as Baird said it is "confident" Tesla's (TSLA) $2.6 billion bid to acquire the renewable energy company will close, Barron's reports.
Based on conversations with Tesla shareholders, Baird estimates an 80% probability the merger with San Mateo, CA-based SolarCity will occur.
The firm also added that SolarCity's recent cash equity sale has alleviated concerns that the company can monetize its investments, Barron's said.
If the deal closes, SolarCity shareholders will receive 0.11 shares of Tesla stock per share of SolarCity, equal to about $23 dollars per share. Baird notes there is a "substantial" spread between the stock's current value and the acquisition price.
"We like SolarCity as a short-term trade and we expect the stock to catch up to its deal price as the shareholder vote nears," the firm said.
Shares of Tesla closed higher on Monday.
Separately, TheStreet Ratings objectively rated SolarCity stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rated this stock as a "sell" with a ratings score of D.
The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.
You can view the full analysis from the report here: SCTY