Tesla Inc (NASDAQ:TSLA)’s CEO Elon Musk’s second day in court testifying on the 2016 SolarCity acquisition was a headline-generating one. Musk asserted that he did not set the terms of the deal, and did not want to be anybody’s boss, according to CNBC.
The Tesla CEO is under fire after a shareholder lawsuit alleges that Tesla’s $2.5 billion move was marred by a conflict of interest, since SolarCity was founded by Musk and two of his cousins, Lyndon and Peter Rive.
The biggest winners of this year’s market turmoil are macro hedge funds. Hedge funds on average are down 4% in 2021, according to data group Hedge Fund Research. However, macro funds were up around 8% on average during the first half of the year. Leading the pack is Crispin Odey, whose flagship Odey European fund Read More
“A Bad Human Being”
During the session in Delaware, Musk argued that he had recused himself from the deal when the Tesla board was negotiating the sale price. “What the lawyers are trying to show is that he was behind the scenes trying to make everything work,” said Will Oremus of the Washington Post.
Lawyers are set out to prove how Musk was pushing to get a higher price for SolarCity, while also trying to conceal how financially bad SolarCity was during Tesla’s acquisition.
At the time, Elon Musk had 22% stakes in the company, and given the fact that it was founded by his cousins, shareholders allege that the deal was a bailout for SolarCity and that it benefited the Musk family.
There were also verbal jibes and jousting between Musk and the plaintiff’s attorney. Tesla CEO told the latter that he thinks he is “a bad human being.” However, analysts say that, ultimately, the attorney has shown that Musk was in close contact with both the Tesla and the SolarCity team while the deal was being negotiated.
Musk asserted that the repetitive contact with the Tesla board was “part of the board process, making sure the board has accurate information.”
A $2 Billion Payment?
During the court session, the Tesla CEO appeared confident and rather irritated. He enjoyed catching the attorney out in any numerical and timeline inaccuracies, in typical Elon Musk style.
All in all, says Oremus, the session also depicted “a clash between this grand vision that Musk sketches out where Tesla had to acquire SolarCity because he needs the clean solar energy to power the clean electric cars.”
Still, he asserts, “there’s a lot of dirty details that kind of run contrary to the narrative that this was all about saving the world.” Should Elon Musk lose the lawsuit, he could have to pay more than $2 billion, as informed by CNBC.
Tesla is part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders’ families.