Tesla Makes Offer to Acquire SolarCity
Some people are questioning the reason behind this offer.  Read between the lines here, folks.  Musk has borrowed heavily to invest in SolarCity and Tesla, and with the ongoing rout in SolarCity shares he is facing a margin call:<p><a href="http:&#x2F;&#x2F;www.nytimes.com&#x2F;2016&#x2F;06&#x2F;22&#x2F;business&#x2F;dealbook&#x2F;tesla-solarcity-elon-musk.html" rel="nofollow">http:&#x2F;&#x2F;www.nytimes.com&#x2F;2016&#x2F;06&#x2F;22&#x2F;business&#x2F;dealbook&#x2F;tesla-so...</a>
&quot;But the transaction highlights the unusual moves that Mr. Musk continues to make to support the various arms of his empire, where he is the largest shareholder of each company.<p>He has taken out loans to buy up shares in Tesla and SolarCity, some backed by his personal stock holdings in both companies — a risky move that leaves him exposed to margin calls if their stock prices slide too far.&quot;<p>And if there&#x27;s a margin call, Musk has to sell a lot of his shares to cover, which imposes considerable risk on the stock price of his companies.  From Tesla regulatory filings:<p>&quot;Tesla has warned investors in U.S. regulatory filings what could happen if Musk had to sell the shares. &quot;The forced sale of these shares pursuant to a margin call could cause our stock price to decline and negatively impact our business.&quot;&quot;<p>This is just CYA for Musk, dressed up with happy talk about vertical integration and increasing synergy and such.<p>Edit: I completely forgot about the massive debt that SolarCity owes to SpaceX- all the more reason to prevent SolarCity from collapsing:  <a href="http:&#x2F;&#x2F;electrek.co&#x2F;2016&#x2F;03&#x2F;22&#x2F;elon-musk-spacex-solar-bonds-solarcity&#x2F;" rel="nofollow">http:&#x2F;&#x2F;electrek.co&#x2F;2016&#x2F;03&#x2F;22&#x2F;elon-musk-spacex-solar-bonds-s...</a><p>&quot;Last year, SpaceX already purchased solar bonds from SolarCity on two separate occasions: another $90 million followed by $75 million. SpaceX’s involvement in SolarCity’s Solar Bond Program is set to total around $255 million&quot;