On Tuesday, June 21st, the Silicon Valley tycoon and Haute 100 lister Elon Musk announced one of his companies —Tesla Motors — has made an offer to buy another one of his companies — solar installation firm SolarCity — in a stock deal worth as much as $2.8 billion.
Musk is the chairman of SolarCity as well as the CEO of Tesla. At this point Musk can sell eco-friendly consumers an electric car, a home battery and a solar system all at once, he said in a call with reporters.
“Instead of making three trips to a house to put in a car charger and solar panels and battery pack, you can integrate that into a single visit,” Musk told reporters. “It’s an obvious thing to do.”
Here are a few key points regarding the call, Tesla and SolarCity:
- Tesla’s stock is down 11 percent at $194.60 prior to the call.
- SolarCity’s stock is up 14 percent at $24.15 in premarket trade, compared with a 15 percent gain to $24.47 before Musk’s call.
- While only one percent of the population uses solar energy, Musk believes if the panels were more pleasing to the eye more people will use them.
- Both Musk and SolarCity CEO Lyndon Rive, Musk’s first cousin, support the deal but would excuse themselves from voting due to conflict of interest and lack of impartiality.
- If needed Tesla will give SolarCity money during the pending acquisition, but Musk doesn’t believe it will be necessary.
For those of you unfamiliar SolarCity, the company was founded in 2006. The company has completed installations in 27 states, with more than 90 operations centers. The company is touted to be one of the most experienced clean energy project design and installation teams in the world. Its customers include Stanford, Yale and Georgetown, government agencies such as the U.S. Armed Forces and Department of Homeland Security, and well-known corporate clients, including eBay, HP, Intel, Walgreens, Walmart and Whole Foods.