Tesla Lost $3 Billion Yesterday. Here's Why
Investors aren’t too fond of the idea of Tesla buying SolarCity.
Shares of Tesla Motors dropped over 10 percent yesterday the American automaker proposed a buyout of SolarCity. That loss cut roughly $3 billion of Tesla’s $32 billion market cap, and actually exceeds the $2.8 billion being offered for the solar power startup.
SolarCity is also one of Tesla CEO Elon Musk’s creations, a rooftop solar company where Musk serves as chairman. Investors are concerned that the two companies will not fit together, even though Musk envisions a single entity for clean energy shoppers, allowing them to purchase an electric vehicle, home solar system and battery backup with one trip.
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Shareholders of both companies are expected to vote on the matter within months and Musk will recuse himself, allowing outside investors to make the decision. Musk remains confident and even said that he has “no doubt about this” during a call with analysts and investors before markets opened today.
SolarCity shares have fallen over 50 percent this year due to a highly competitive market, stirring some to criticize that the proposed deal is meant to save SolarCity.
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Jason Siu began his career in automotive journalism in 2003 with Modified Magazine, a property previously held by VerticalScope. As the West Coast Editor, he played a pivotal role while also extending his expertise to Modified Luxury & Exotics and Modified Mustangs. Beyond his editorial work, Jason authored two notable Cartech books. His tenure at AutoGuide.com saw him immersed in the daily news cycle, yet his passion for hands-on evaluation led him to focus on testing and product reviews, offering well-rounded recommendations to AutoGuide readers. Currently, as the Content Director for VerticalScope, Jason spearheads the content strategy for an array of online publications, a role that has him at the helm of ensuring quality and consistency across the board.
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Solar City has some major problems, search the web, many that have bought into their lease plan are not happy.
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