Tesla co-founder and CEO Elon Musk is being prosecuted by a Tesla shareholder in the wake of the company's $2.6billion buy-out of solar panel company SolarCity.
Musk's electric car company Tesla declared that it would buy SolarCity, which sets up houses with solar panel roofs. This event took place on the 1st of August. The company officials then stated that they would raise the finance through a stock sale. However, now a shareholder is condemning Musk's irresponsible move and taking him to court.
A couple of years ago, Elon Musk charted out his vision for Tesla in ‘The Secret Tesla Motors Master Plan’. Herein, Musk initiated the write-up by describing Tesla as a job on the side, an entertaining categorization, in retrospect.
Tesla's Lawsuit Agony
Factually, the lawsuit condemns Musk as treating Tesla like a surreptitiously held company and not a public one. In addition, it accuses him of moving around the finance to suit his own impulses. And not safeguard shareholders' interests.
Furthermore, the lawsuit adds that Tesla is already under pressure and requires focusing on cars, not solar panels. They believe that solar panels can be a dangerous distraction. Additionally, it accuses SolarCity to be weakening. The occurrence of this despite Musk's' striving plans to restore the roofs of five million homes with solar shingles that absorb sun energy and replace conventional solar panels.
Also, other details of the lawsuit such as the identity of the shareholder and where the suit was wedged are not lucid at this time. The shareholder argues that Musk's move to instill his failing SolarCity with $2.6 billion of Tesla stock is disgraceful, self-involved and reckless.
Previous accusations from shareholders claim Tesla co-founder and CEO Elon Musk, of trying to run Tesla like a privately held company. In addition to, Musk was alleged to revolve money around not because it was right for the car company but to set up his own legacy of changing the world.
Further, the lawsuit reveals that Tesla itself is operating in the downfall, burning cash. In addition to, Musk should focus on building electric cars. The shareholder says SolarCity is a contemptible. And the company fell on the auction block recently and didn't draw a sole bidder.
The Share Market Scenario
Amongst all this legal debate, shares in both Tesla and SolarCity plunged low at the start of the month. Tesla and SolarCity fell 5.3 per cent 9.1 per cent respectively on September 1, 2016.
However, even if Tesla's shares are at a high - $201.71 since then, they are still lower than the $212.01 they were on August 31. Meanwhile, SolarCity shares have continued to fall, now hitting at $18.06, much lower from $20.66 on August 31.
Tesla’s shares have gone down more than 18 percent in this year. This is due to the safety of the brand’s Autopilot feature in the electric vehicle being uncertain after subsequent crashes. Even the shareholders concern about the company’s pending acquisition of money-losing solar company SolarCity Corp has contributed to this decline.
Moreover, there came a sudden outburst of one of SpaceX rockets on the launch pad recently in this month. Tesla co-founder and Chief Executive Officer Elon Musk’s anguish intensified with this event.