Yesterday, Tesla shareholders voted to approve the company's acquisition of SolarCity, paving the way for the merger of Musk's two companies: http://
Founded in October 2008, SolarCity is a US-based company that develops home photovoltaic projects in Foster City, California. SolarCity offers comprehensive solar services from system design, installation and financing, and construction supervision.
Tesla announced in June that it had reached a $26 billion acquisition agreement with SolarCity, but it still has to wait for shareholder approval. However, the deal still sparked some controversy, in part because of corporate governance concerns. Musk also serves as chairman and largest shareholder of the two companies, and Solarcity was founded and operated by his two cousins.
SolarCity Solar Panel
In a blog post defending the deal, Musk wrote: “Although they have similar origins and pursue the same overall goal of sustainable energy, they are completely independent of each other. This is just a coincidence of history.†In order to alleviate investor concerns, Musk gave up his voting rights in the acquisition.
Some critics still believe that Musk wants to use his own company to stabilize another company.
So far, SolarCity shares have fallen 60% this year. The company’s cash reserves in June this year were only $146 million, much lower than the $421 million a year ago. Previously, SolarCity released its second-quarter earnings report. The company's net loss for the period reached $55.5 million, or a diluted loss of 56 cents per share, less than the net loss of $22.4 million, or a diluted loss of 23 cents per share. It has expanded compared with the same period last year.
To make matters worse, Tesla is also burning money. The company is currently investing billions of dollars in building a battery factory and is also stepping up production of the Model 3, the first Tesla electric car to be launched for the mass market.
In the face of these difficulties, fortunately Tesla released the first quarterly earnings report for more than three years last month, and said that this trend will continue in the next quarter. The report shows that the company's total revenue for the quarter was 2.3 billion US dollars, compared with 937 million US dollars in the same period last year, an increase of 145%, higher than analysts expected.
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