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Elon Musk Wins Controversial SolarCity Trial: Judge Rules Tesla Paid a Fair Price for It

Apart from Tesla losing a bit less than three Twitters in value on April 26, Elon Musk has been collecting good news this week. The latest one is that he won the SolarCity trial in which he was accused of buying the company just to prevent personal losses if the company went bankrupt.
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Despite the evidence that SolarCity was indeed bleeding cash, Vice-Chancellor Joseph R. Slights III considered that Tesla paid a fair price for the company. What he did recognize was that “Elon was more involved in the process than a conflicted fiduciary should be.” The Tesla CEO was SolarCity's chairman and a major sponsor of the company. If it went bust, he would lose a lot of money. Slights retired right after deciding the case, which investors can still appeal to the Delaware Supreme Court.

If the investors that sued Musk and Tesla see any possibility of reverting the decision, they will pursue it. After all, Musk was the only Tesla director to challenge the investors’ claims. All others decided to settle for $60 million, a value that Bloomberg tells us was paid by insurance coverage.

On top of that, the fundament for the decision is controversial. Slights said that “Tesla’s value has massively increased following the Acquisition.” That would be enough for the investors suing Tesla not to have any reason to complain about the deal because there was “a causal connection between the Acquisition and Tesla’s skyrocketing performance.” As far as we know, the solar business has not been anything but trouble for Tesla so far.

The number of unhappy customers with Tesla Solar increases every day, and there are some extreme cases. On January 14, we told how a Tesla Model X owner lost the roof of her house due to installation mistakes that forced her to move. She is suing Tesla. In March, Tesla stopped solar roof installations due to supply concerns, leaving customers without roofs for months.

Although the judge believes that being the “world’s first vertically-integrated sustainable energy company” contributed to Tesla’s market cap, that is not undisputed. Some believe this has more to do with Elon Musk’s promises, some of which he has repeatedly failed to deliver, such as autonomous driving. It seems this story is far from over. We’ll keep you updated about it.

 
 
 
 
 

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