Sky Rocket and to the moon

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2021-07-12

Sky Rocket and to the moon

Elon Musk Is Called to Defend Tesla’s Purchase of SolarCity

Plaintiffs allege that the billionaire entrepreneur led Tesla to overpay for SolarCity in 2016. Mr.

Elon Musk Is Called to Defend Tesla’s Purchase of SolarCity

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Mr. ","content":"<blockquote>\n Plaintiffs allege that the billionaire entrepreneur led Tesla to overpay for SolarCity in 2016. Mr. Musk has defended the deal.\n</blockquote>\n<p>In 2016,Elon Muskhad two unprofitable businesses on his hands in Tesla and SolarCity Corp. His solution to improve their outlook: combine them into asingle clean-energy business.</p>\n<p>Five years later, Mr. Musk is being called to defend the propriety of that roughly $2.1 billion tie-up in a Delaware court. Plaintiffs, which include several pension funds that owned Tesla stock, have characterized the deal as a scheme to benefit himself and bail out a home-solar company on the verge of insolvency.</p>\n<p>Mr. Musk, who is expected to take the stand in the nonjury trial as early as Monday, was chairman of both companies at the time. His attorneys have framed the acquisition as an opportunity to realize his long-held goal of creating avertically integrated sustainable energy company.</p>\n<p>A primary question in the case is whether Mr. Musk, who owned roughly 22% of Tesla at the time, controlled the transaction. Proving that claim is a challenge because Mr. Musk was a minority shareholder of Tesla and the company’s shareholders approved the acquisition. Lawyers for Mr. Musk say that SolarCity was worth more than Tesla paid for it and the electric vehicle-maker’s board members, who included Mr. Musk’s brother, Kimbal Musk, acted independently.</p>\n<p>Other issues before the judge include whether Tesla board members were conflicted and whether vital information about the deal was withheld from shareholders.</p>\n<p>If Mr. Musk loses, he could be asked to makeTeslaInc.TSLA0.63%whole. That payment could equal the value of the SolarCity transaction if the presiding judge finds that the solar firm wasn’t worth anything when Tesla agreed to buy it.</p>\n<p>The trial in Delaware Chancery Court has been delayed for more than a year because of the coronavirus pandemic. Mr. Musk is the lone board member being sued. Tesla’s other board members at the time of the SolarCity tie-up agreed to settle last year for a combined $60 million, paid by insurance. The board members, some of whom had interests in both Tesla and SolarCity, denied wrongdoing.</p>\n<p>Mr. Musk has built areputation as an unusualand sometimescombative chief executive. He has already flashed some of that in the case, making for a confrontational witness in a 2019 deposition, repeatedly goading plaintiff’s attorney Randall Baron, whom he called “reprehensible” for “attacking sustainable energy.”</p>\n<p>“SolarCity I think would have done just fine by itself and Tesla would have done fine by itself, but in the long-term, they are better together. And that is what the future will show,” Mr. Musk said in the deposition.</p>\n<p>Mr. Musk brought the proposed deal to Tesla’s board in early 2016, court records show. The plaintiffs describe SolarCity as having been in severe financial distress leading up to the deal, at risk of tripping a debt covenant and without other fundraising options. Shareholders weren’t fully informed of the company’s condition, they say.</p>\n<p>Founded in 2006 by Mr. Musk’s cousins, SolarCity generated net losses of $769 million and $375 million in 2015 and 2014, respectively.</p>\n<p>Attorneys for Mr. Musk say SolarCity was solvent and could have pursued other fundraising options.</p>\n<p>When Mr. Musk testifies, he is likely to be asked about how much involvement he had in the deal with SolarCity, said Lawrence Hamermesh, executive director of the Institute for Law and Economics at the University of Pennsylvania’s Carey Law School. “One of the things the plaintiffs are going to want to show is whether he had his fingers all over the negotiations and development and timing of the deal,” Mr. Hamermesh said.</p>\n<p>That information will help the court decide whether the Tesla chief executive controlled the company’s consideration of the merger, as will testimony about some directors’ conflicts of interest and whether they made their decisions independently.</p>\n<p>If Vice Chancellor Joseph Slights III, the presiding judge, finds Mr. Musk didn’t control the deal, the case is likely over for the plaintiffs, Mr. Hamermesh said. Case law in Delaware generally defers to the business judgment of independent and properly motivated directors. On the other hand, if the evidence points to control, the court would assess whether the deal process and price were fair and, if not, whether Mr. Musk should be ordered to pay money back to Tesla, Mr. Hamermesh said.</p>\n<p>“The theory would be that Tesla has been damaged and Musk is the responsible party,” he said. “He would have to make Tesla whole.”</p>\n<p>For Mr. Musk, who now ranks among the wealthiest people on the planet, the optics of a loss likely would be more meaningful than any court-ordered financial judgment, said Seth Goldstein, an analyst for Morningstar Research Services LLC.</p>\n<p>“You could see the board become extra diligent with regard to acquisitions that aren’t in Tesla’s current, existing industries,” Mr. Goldstein said.</p>\n<p>Mr. Musk is no stranger to court appearances. In 2019, he was called to the stand in a case in which a British cave exploreraccused him of defamation. The juryfound him not guilty.</p>\n<p>The prior year, the Securities and Exchange Commission sued Mr. Musk and Tesla over claims that he misled investors through his tweets. Mr. Musk and Tesla settled the lawsuit by each paying $20 million, andMr. Musk agreed to have certain of his tweets reviewedby Tesla’s lawyers before publishing them.</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Elon Musk Is Called to Defend Tesla’s Purchase of SolarCity</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nElon Musk Is Called to Defend Tesla’s Purchase of SolarCity\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-07-12 07:59 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.wsj.com/articles/elon-musk-is-called-to-defend-teslas-purchase-of-solarcity-11626001200?mod=hp_lead_pos4><strong>The Wall Street Journal</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Plaintiffs allege that the billionaire entrepreneur led Tesla to overpay for SolarCity in 2016. Mr. Musk has defended the deal.\n\nIn 2016,Elon Muskhad two unprofitable businesses on his hands in Tesla ...</p>\n\n<a href=\"https://www.wsj.com/articles/elon-musk-is-called-to-defend-teslas-purchase-of-solarcity-11626001200?mod=hp_lead_pos4\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"TSLA":"特斯拉"},"source_url":"https://www.wsj.com/articles/elon-musk-is-called-to-defend-teslas-purchase-of-solarcity-11626001200?mod=hp_lead_pos4","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1101488191","content_text":"Plaintiffs allege that the billionaire entrepreneur led Tesla to overpay for SolarCity in 2016. Mr. Musk has defended the deal.\n\nIn 2016,Elon Muskhad two unprofitable businesses on his hands in Tesla and SolarCity Corp. His solution to improve their outlook: combine them into asingle clean-energy business.\nFive years later, Mr. Musk is being called to defend the propriety of that roughly $2.1 billion tie-up in a Delaware court. Plaintiffs, which include several pension funds that owned Tesla stock, have characterized the deal as a scheme to benefit himself and bail out a home-solar company on the verge of insolvency.\nMr. Musk, who is expected to take the stand in the nonjury trial as early as Monday, was chairman of both companies at the time. His attorneys have framed the acquisition as an opportunity to realize his long-held goal of creating avertically integrated sustainable energy company.\nA primary question in the case is whether Mr. Musk, who owned roughly 22% of Tesla at the time, controlled the transaction. Proving that claim is a challenge because Mr. Musk was a minority shareholder of Tesla and the company’s shareholders approved the acquisition. Lawyers for Mr. Musk say that SolarCity was worth more than Tesla paid for it and the electric vehicle-maker’s board members, who included Mr. Musk’s brother, Kimbal Musk, acted independently.\nOther issues before the judge include whether Tesla board members were conflicted and whether vital information about the deal was withheld from shareholders.\nIf Mr. Musk loses, he could be asked to makeTeslaInc.TSLA0.63%whole. That payment could equal the value of the SolarCity transaction if the presiding judge finds that the solar firm wasn’t worth anything when Tesla agreed to buy it.\nThe trial in Delaware Chancery Court has been delayed for more than a year because of the coronavirus pandemic. Mr. Musk is the lone board member being sued. Tesla’s other board members at the time of the SolarCity tie-up agreed to settle last year for a combined $60 million, paid by insurance. The board members, some of whom had interests in both Tesla and SolarCity, denied wrongdoing.\nMr. Musk has built areputation as an unusualand sometimescombative chief executive. He has already flashed some of that in the case, making for a confrontational witness in a 2019 deposition, repeatedly goading plaintiff’s attorney Randall Baron, whom he called “reprehensible” for “attacking sustainable energy.”\n“SolarCity I think would have done just fine by itself and Tesla would have done fine by itself, but in the long-term, they are better together. And that is what the future will show,” Mr. Musk said in the deposition.\nMr. Musk brought the proposed deal to Tesla’s board in early 2016, court records show. The plaintiffs describe SolarCity as having been in severe financial distress leading up to the deal, at risk of tripping a debt covenant and without other fundraising options. Shareholders weren’t fully informed of the company’s condition, they say.\nFounded in 2006 by Mr. Musk’s cousins, SolarCity generated net losses of $769 million and $375 million in 2015 and 2014, respectively.\nAttorneys for Mr. Musk say SolarCity was solvent and could have pursued other fundraising options.\nWhen Mr. Musk testifies, he is likely to be asked about how much involvement he had in the deal with SolarCity, said Lawrence Hamermesh, executive director of the Institute for Law and Economics at the University of Pennsylvania’s Carey Law School. “One of the things the plaintiffs are going to want to show is whether he had his fingers all over the negotiations and development and timing of the deal,” Mr. Hamermesh said.\nThat information will help the court decide whether the Tesla chief executive controlled the company’s consideration of the merger, as will testimony about some directors’ conflicts of interest and whether they made their decisions independently.\nIf Vice Chancellor Joseph Slights III, the presiding judge, finds Mr. Musk didn’t control the deal, the case is likely over for the plaintiffs, Mr. Hamermesh said. Case law in Delaware generally defers to the business judgment of independent and properly motivated directors. On the other hand, if the evidence points to control, the court would assess whether the deal process and price were fair and, if not, whether Mr. Musk should be ordered to pay money back to Tesla, Mr. Hamermesh said.\n“The theory would be that Tesla has been damaged and Musk is the responsible party,” he said. “He would have to make Tesla whole.”\nFor Mr. Musk, who now ranks among the wealthiest people on the planet, the optics of a loss likely would be more meaningful than any court-ordered financial judgment, said Seth Goldstein, an analyst for Morningstar Research Services LLC.\n“You could see the board become extra diligent with regard to acquisitions that aren’t in Tesla’s current, existing industries,” Mr. Goldstein said.\nMr. Musk is no stranger to court appearances. In 2019, he was called to the stand in a case in which a British cave exploreraccused him of defamation. The juryfound him not guilty.\nThe prior year, the Securities and Exchange Commission sued Mr. Musk and Tesla over claims that he misled investors through his tweets. Mr. Musk and Tesla settled the lawsuit by each paying $20 million, andMr. Musk agreed to have certain of his tweets reviewedby Tesla’s lawyers before publishing them.","news_type":1},"isVote":1,"tweetType":1,"viewCount":338,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":21,"xxTargetLangEnum":"ORIG"},"commentList":[],"hasMoreComment":false,"orderType":2}