In 2016 Tesla bought SolarCity for $2.6bn. Now the SolarCity brand no longer exists. A group of Tesla’s investors at the time are demanding Elon Musk repays the cost of the ill-starred deal
ELON MUSK is not known for being self-effacing. The self-appointed “technoking” of Tesla, the world’s most valuable carmaker, has cultivated a punchy public image and seemed to court controversy. So intertwined is his identity with that of the maker of electric cars that he has been known to sleep on the factory floor. In his waking hours, he is its prominent public face.
The court hearing, which is scheduled to last for two weeks, got off to a spirited start on July 12th . Unlike fellow Tesla directors who, while denying wrongdoing, settled for $60m last year, Mr Musk rejects the plaintiffs’ claims and is taking the fight to them. He tussled for hours with their lawyer, at one point calling him “a bad human being”. Tesla’s chief executive was back in court again on July 13th.
The second question is whether the process that led to the deal, and the price itself, were fair. The technoking says he recused himself from talks over the deal; the plaintiffs call this move “superficial”. Another question is whether the severity of SolarCity’s financial distress was made clear enough to shareholders. And plaintiffs will want to highlight possible conflicts of interest among Tesla board members, some of whom directly or indirectly owned SolarCity stock.
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