With SolarCity owing money to SpaceX — Musk’s unlisted rocket developer — and insiders, and Tesla needing cash itself, the electric-vehicle maker’s highly valued shares are critical. In a rational world, holders of those shares would consider SolarCity’s wide discount alongside the fact that, despite this apparent bargain, no other bidders have emerged, and conclude Tesla is clearly overpaying and they should vote the deal down.

One twist they have to contend with, though, is that, in the absence of near-term profits, the value of Tesla’s stock is inextricably bound up with belief in the abilities and vision of Musk himself. While the decision to buy SolarCity may have dimmed that aura somewhat, a potential collapse at SolarCity if the deal doesn’t go through could be even more damaging — one of those damned if you do, damned if you don’t situations. Nothing is simple once you’ve entered the Muskplex.

Read More

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s