Tesla shareholder sues Elon Musk for ‘using $2.6BILLION of Tesla stock to prop up failing solar panel company’
- Tesla announced it would buy SolarCity for $2.6b in August
- The money for the purchase would come from Tesla stock sales, it said
- Now a shareholder is suing owner Elon Musk for that ‘irresponsible’ move
- Musk ‘uses Tesla like a private company not a public one’ the suit claims
- Shares of both Tesla and SolarCity fell after the announcement was made
Elon Musk is being sued by a Tesla shareholder in the wake of the company’s $2.6billion buy-out of solar panel company SolarCity, it has been reported.
Musk’s electric car company announced it would buy SolarCity, which kits out houses with solar-panel roofs, on August 1 – and said it would raise the money through a stock sale.
But now a shareholder is criticizing Musk’s ‘irresponsible’ move – and taking him to court, TMZ reported.
Lawsuit: Tesla co-founder Elon Musk is reportedly facing a shareholder lawsuit after it was announced the company would buy solar panel company SolarCity using $2.6b of Tesla stock
According to TMZ, the suit says that Musk is treating Tesla like a privately held company, not a public one, by moving around money to suit his own whims rather than to protect shareholders’ interests.
Tesla is already struggling and needs to focus on cars, not solar panels, which are ‘a dangerous distraction,’ the suit adds.
It also claims that SolarCity is ‘failing,’ despite Musk’s’ ambitious plans to replace the roofs of 5million houses with ‘solar shingles’ that absorb sun energy and replace conventional solar panels.
Other details, including the identity of the shareholder and where the suit was lodged, are not clear at this time.
Shares in both Tesla and SolarCity plunging at the start of the month, when the stock sale was announced, The Mercury News reported.
Tesla fell 5.3 per cent and SolarCity 9.1 per cent on September 1.
Tesla’s shares have gone up since then to $201.71, but that’s still down from the $212.01 they were on August 31.
SolarCity, meanwhile, has continued to fall, now clocking in at $18.06, down from $20.66 on August 31.
Plummet: SolarCity equips houses with solar panels. Tesla announced it was buying the company in August using Tesla stock – causing shares for both companies to plummet
Musk’s woes have been compounded by the explosive end met by one of his unmanned SpaceX rockets Thursday.
SpaceX now faces a $49million bill from Spacecom, the company that manufactured the satellite it was supposed to be delivering into orbit.
Spacecom also said that it wants to see ‘several’ safe flights before it will work with SpaceX again.
Complaint: The suit complains that Musk is treating Tesla like a private company, moving money to suit his own interests rather than to improve Tesla’s standing