Following up on July 15's "Elon Musk’s Lawsuit Testimony Was Interrupted By Vomiting Lawyer (SCTY; TSLA)".
From Bloomberg via Yahoo Finance:
Elon Musk was acting as a proper chief executive officer as Tesla Inc. weighed the purchase of power provider SolarCity in 2016, his longtime ally and fellow Tesla director Antonio Gracias told a judge.
A two-week trial over the billionaire CEO’s role in the $2 billion transaction wrapped up on Monday, and now Judge Joseph Slights III must decide whether Musk -- who was the solar company’s chairman and largest shareholder at the time -- properly removed himself from the deal to avoid conflicts of interest.
Gracias, the last witness, was questioned by Musk’s attorney about the 50-year-old chief’s role in the acquisition. He emphasized that Musk removed himself from the deal’s pricing and from voting on the acquisition but had a legitimate part to play.
“He’s recused from the deal, but not from doing his job,” Gracias testified under questioning by Daniel Slifkin. He said he and Musk made themselves “available” to Tesla’s board for any questions on the purchase.
The shareholders who sued Musk say the purchase was tainted by his influence with his board and his ties to the solar company. In addition to his own role there, its CEO was Lyndon Rive, his cousin.
Gracias, head of tech investment firm Valor Equity Partners, was one of the early investors in Tesla and also owned SolarCity stock and served on the solar company’s board. Under questioning by Christine Mackintosh, a lawyer for pension funds suing over the deal, he said he had to decide which side of the deal to work on and chose Tesla over SolarCity.
At one point Mackintosh said board minutes showed both Musk and Gracias were present when other directors were discussing how much to pay for SolarCity.
“If that’s what the minutes say, that’s correct,” said Gracias, who is set to leave Tesla’s board in October. He said he didn’t pay attention to the pricing discussion since, like Musk, he was recused from considering the issue.
The judge, who heard the complex case in Delaware Chancery Court without a jury, may take months to decide whether to make Musk dig into his pocket and return the money Tesla paid for SolarCity. So far Slights has homed in on Musk’s recusal, questioning Tesla’s chair, Robyn Denholm, at length last month about her knowledge of Musk’s activities as board members gathered information on the deal.
“It appears from the evidence there were some discussions occurring between Mr. Elon Musk and Mr. Rive outside the board process,” Slights said, according to a transcript of the trial....
....MUCH MORE
We have maybe 50 posts on the merger, ranging from the practical to the esoteric to the tongue-in-cheek. Some examples:
That's ZeroHedge's headline. They forgot the acute accent (not to be confused with a cute accent) in exposé.
Over the years we've had some thoughts on Tesla's purchase of SolarCity, oh look, here's 2017's "So, How Was Tesla's Purchase Of SolarCity Not a Fraud? (TSLA; SCTY)". Unfortunately it didn't get a rise out of Elon, discovery would have been fun.
We like Bethany McLean, Vanity Fair not so much since finding out they spiked stories on Jeffrey Epstein and his victims.
More On SolarCity/Tesla and Fairness Opinions (SCTY; TSLA)
Credit where credit is due.
Looking at the twitter timestamp, this writer was quite a few steps ahead of yours truly in thinking of the exchange ratio, a topic of intense interest to a vanishingly small subset of humanity but actually quite important.*If the headline on that FRAUD post (and the dozen links within) doesn't get the point across, here's another one on Elon and his cousins the Rive brothers:
August 1, 2016
Tesla-Solar City: Cousins Shouldn't Get Married (to each other) TSLA; SCTY--UPDATED
Or
June 22, 2016
SolarCity/Tesla: Analysts React (SCTY; TSLA)
Not only is Tesla taking on almost $3 billion in SolarCity debt, it is also buying into the problem of even more negative cash flows, both Operating and FreeCashFlow.And now, dammit, for some reason I want to throw that damn accent mark on Élon and Rivé and...
Which of course, along with the corp. governance nastiness, explains why Tesla has lost almost 11% of its market cap, amounting to $3.14 billion on the 133 million shares out and more than the entire market cap for SCTY (98,296,422 shares at $22.30, up 5.2%).
The market is saying SCTY is worth less than zero to Tesla.
We'll have a lot more to say about this in the coming days....
See also:
July 27, 2017
Why SolarCity Has Become a Shell of Its Former Self Since Tesla Buyout (TSLA)
This is a $3,000,000,000 scandal and no one seems to care....
And many, many more, use the search blog box if interested.
