NEW YORK (TheStreet) -- Shares of SolarCity (SCTY) were advancing in mid-afternoon trading on Monday though Oppenheimer said electric car maker Tesla's (TSLA) $2.6 billion bid to buy SolarCity could be slowed by regulatory reviews.
"While we have argued that Tesla's acquisition of SolarCity would likely be completed, we believe the SEC review process could be delayed due to recent activity, especially new litigation," the firm said.
SolarCity, a renewable energy company, was recently sued by competitor SunPower (SPWR) and venture capital firm Khosla Ventures for violating intellectual properties with its solar roof shingle product, the firm noted.
Additionally, Tesla is currently facing several shareholder lawsuits opposing the deal.
"We believe extension to the timeline is likely to work against the deal given the risk of ongoing collaboration to trigger gun-jumping rules," Oppenheimer added.
But the firm noted that San Mateo, CA-based SolarCity's two recent asset deals and Tesla's strong third quarter deliveries could support bullish arguments.
Oppenheimer has a "perform" rating on Tesla stock.
Shares of Tesla were rising 5.08% to $214.40 on heavy trading volume Monday afternoon. More than 5.03 million Tesla shares have traded so far today vs. the 30-day average volume of 3.18 million shares.
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