Financier labels auto firm Tesla “shameful” as it attempts to buy financially-burdened energy company
American financier Jim Chanos has branded Tesla “shameful” for its attempt to buy the Californian energy company, SolarCity, which is currently under financial pressure.
On Tuesday last week, Tesla approached SolarCity with a buy out offer of $2.8 billion (1.9bn), which Tesla chief, Elon Musk, described as a “no brainer”.
Elon Musk has a 22% stake in SolarCity and is currently chairman of the company’s board. The energy firm offers solar power energy solutions, including design, installation and finance and entered the electric vehicle charger market in 2009. It currently employs over 13,000 people.
Musk and chief executive of SolarCity, Lyndon Rive, are cousins. The two companies are seemingly inextricably linked.
Of the potential buy out, Mr Musk said: “As a combined automotive and power storage and power generation company, the potential is there for Tesla to be a trillion-dollar market cap company.”
However, financier, Jim Chanos said Tesla’s attempt to buy SolarCity was a “shameful example of corporate governance at its worst” and that the financial position at the energy firm would place Tesla under its own burdens, thus affecting its shareholders.
Mr Musk, however, disagrees with this claim, forecasting a positive financial outcome within three to six months, which, considering the company’s $6bn debt and recent net loss of $25m in the first quarter of 2016, appearts to be quite ambitious.
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