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Elon Musk's Tesla Plans To Acquire Elon Musk's SolarCity For $2.7B In Stock (techcrunch.com)

Posted by BeauHD on from the live-off-the-grid dept.

An anonymous reader writes from a report via TechCrunch: Today, Elon Musk's electric car and battery company Tesla has announced its offer to buy solar panel installation company SolarCity. Now is a better time than ever to acquire SolarCity, as it recently had its value downgraded. If Tesla does acquire SolarCity, the companies could allow you to outfit your home with solar panels that power a giant battery for your various appliances, such as an electric vehicle. The deal, which has yet to be approved by SolarCity and its board, involves SolarCity's stock being exchanged for Tesla stock. TechCrunch reports that "the deal would pay a premium of 21% to 30% on top of SolarCity's value of $2.14 billion, so Tesla would be buying SolarCity for between $2.59 billion and $2.78 billion worth of its stock." The Tesla team writes, "It's now time to complete the picture. Tesla customers can drive clean cars and they can use our battery packs to help consume energy more efficiently, but they still need access to the most sustainable energy source that's available: the sun." Elon Musk has also been in the news today through OpenAI, the artificial-intelligence non-profit backed by Elon Musk, Amazon Web Services and others. OpenAI announced it is working on creating a physical robot that performs household chores.

2 of 55 comments (clear)

  1. This is common in Silicon Valley by comrade1 · · Score: 5, Interesting

    It's common for a successful company to buy out investors in an unsuccessful company as a way to move value out of the sham higher value company directly into the lower value company, because, of course, they'd rhe same investors. It's a way to get a pay off early without selling off your tesla stock. Same thing happened with the YouTube buyout by Google. The VC firm that funded both companies wanted a payoff even though at the time the deal made no sense.

  2. Re:So where does mr. Elon Musk figure in all this? by Anonymous Coward · · Score: 2, Interesting

    And both companies have never been profitable.

    SolarCity is an interesting enterprise. Its existence is wholly dependent on federal and state subsidies, more than $400 million in federal tax credits so far. Since the company is the one that owns the solar equipment, it gets the subsidy rather than their residential and business customers with 20 year leases. They don't even have their own installers, they contract for that service and they have a significant number of cases with incorrect installations. It is a great scam.