Tesla's SolarCity Deal That Became a $2.6B Mistake
Tesla's SolarCity Deal That Became a $2.6B Mistake
In 2016, Elon Musk convinced Tesla shareholders to spend $2.6 billion acquiring SolarCity, a company he co-founded, chaired, and had personally invested tens of millions into, right as it was burning through cash and heading toward collapse. What followed was one of the most contested corporate governance lawsuits in American history, an 80% decline in solar deployments, and a flagship product that landed on roughly 3,000 rooftops after seven years against a stated goal of 1,000 per week.
This video traces the full arc of the SolarCity acquisition, from the Burning Man conversation where Musk pitched the idea to his cousins Lyndon and Peter Rive, through the company's rise to 35% residential market share, to the 2016 crisis that saw the stock collapse 75% while short sellers piled in. You'll learn how six of Tesla's seven board members carried relationships with SolarCity or SpaceX, why SpaceX purchased $255 million in SolarCity bonds while Musk personally bought another $65 million during negotiations, and how a $100 million bond purchase by the Musk and Rive families prevented a liquidity covenant breach just before the shareholder vote.
We examine the Solar Roof unveiling staged three weeks before that vote, with non-functional prototype tiles Musk later acknowledged under oath still weren't working three years later, the eleven-day Delaware trial where Musk called the plaintiff's attorney "a bad human being," and the court ruling that called the deal "entirely fair" while noting Musk "was more involved in the process than a conflicted fiduciary should be."
Capital Unraveled covers the deals, decisions, and moments where vision and money collide.
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00:00 INTRO
00:53 CHAPTER 1: The Rise of SolarCity
02:22 CHAPTER 2: The Cracks Appear
03:57 CHAPTER 3: The Proposal and the Conflicts
06:34 CHAPTER 4: The Solar Roof and the Vote
08:13 CHAPTER 5: The Collapse of the Solar Dream
10:13 CHAPTER 6: The Lawsuit
12:16 OUTRO
Sources:
Delaware Court of Chancery Opinion, Delaware Supreme Court Opinion, SEC Filings, CNBC, Tesla Master Plan Part Deux, Wood Mackenzie, Reuters, Fortune, Bloomberg Law, Electrek, Utility Dive, TechCrunch, Investigative Post, Energy Storage News, Fast Company, The Street, Harvard Business School, Insurance Journal, MIT Technology Review, Wikipedia, Seeking Alpha