With the Tesla acquisition of Solar City being recently approved by financial regulators, the two companies are set to be merged in the near future.
While the public has mostly been supportive of the acquisition, in reality, the merger is nothing but a “sham” merger – a murky financial manipulation to funnel money to a company near bankruptcy run by Musk’s relatives (Solar City was founded by Lyndon Rive, Musk’s cousin). In essence, Musk stole and misused and laundered Tesla shareholder funds, reducing shareholder value and Tesla’s market position.
Musk’s “reasons” for the merger include the pretend notion that two companies will share “technology”. This is nothing but a bogus notion of somehow these companies being completely independent entities – they are not. All 3 are owned by Musk or his relatives and have shared technology since the very beginning. They probably all sit in the same boardroom. Each company buys each other’s bond offerings, with SpaceX holding millions of dubious SolarCity bonds – which no other institutional investors apparently wanted to buy.
SolarCity (as well as Tesla) have never turned a profit and are solely supported by investor funds. In 2013, SolarCity’s operating income was a loss of $149M, in 2014 – $335M, and in 2015 – $647M.
It’s truly disturbing that neither the US financial regulators nor the US public are alarmed by this sham merger.
Virtually all solar companies similar to Solar City have engaged in sham models and questionable sales practices to dupe gullible consumers into purchasing expensive, often ineffective solar solutions, putting people in thousands of dollars in debt for many years. Solar City was no exception. The company was deeply in debt and has never been profitable. Acquiring it would’ve presented absolutely no benefit for any entity, including Tesla.
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