
SolarCity was insolvent when Tesla paid $2.6B to buy it, lawsuit says - close04
https://arstechnica.com/tech-policy/2019/09/solarcity-was-insolvent-when-tesla-paid-2-6-billion-to-buy-it-lawsuit-says/
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sunstone
This is short term thinking. Tesla's ultimate goal is to provide the complete
package of electric car, battery and solar generation for homes and
businesses. Buying Solar City obviously ticked the missing box of solar.

That was the plan and good one. It probably hasn't gone as well so far as Musk
expected at the time but the game isn't over yet. There is strong demand for
the Tesla solar tiles when they finally ship in quantity and at that time this
buyout will look much better.

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prepend
The argument is that Tesla overpaid, not that they shouldn’t have purchased.

If SolarCity was insolvent then Tesla should have paid less. This would be
better for Tesla employees and shareholders.

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sunstone
So you're saying it's kind of like how HP overpaid for Autonomy? :) Valuations
are tricky at the best of times never mind in tech. It's easy to have an
opinion. It's a lot harder to prove it in court.

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AndrewBissell
In this case it's a bit easier to prove in court because there is documented
evidence of Solar City's auditor signaling the need to use "going concern"
language, and top executives at Solar City discussing the dire financial
straits that any further revenue declines would put the company in. Top
executives who reported, ultimately, to Elon Musk, who also had access to all
the same financials they were looking at. They're also unable to plead
ignorance because Tesla's CFO at the time, Jason Wheeler, made a very frank
presentation to the Tesla Board laying out all the reasons Solar City was a
ticking financial timebomb, and this is also coming out in the lawsuit.

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nelsonic
Does anyone else get the feeling these shareholders are shooting themselves in
the foot by wasting Elon's time with this lawsuit? Or is it that this is
fueled by a competitor? Sure it's not great if Elon used his power/influence
to push the Solar city transaction, but Elon has created and will continue to
create so much value for shareholders, surely it's in _everyone 's_ best
interest to let him focus on building better products instead of distracting
him with this noise?

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thefj
He bought a falling company from himself and his cousins for almost 3 billion,
plus the company had 3 billion in debt. The deal resulted in him getting half
a billion more in tsla stock.

Tesla's market cap in June 2016 was 35 billion. It's 43 billion now. That's
not that much value created. The S&P went up almost 50 percent in that time.

It's all besides the point anyway, since many shareholders sold their shares
because of this fraud. They don't care what he's doing now, they just want
their money back.

It's in _everyone 's_ best interest to have checks on self dealing CEOs. If
people can't trust public companies to behave, the whole system breaks down.

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jmpman
Isn’t that what the board is for?

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AndrewBissell
The Tesla Directors are paid many multiples of the average at other comparable
companies so that they will not question or push back against Elon Musk, and
they include many personal friends and even his brother, who has no
qualifications whatsoever to sit on the Board of a major automaker.

