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Business

Lawsuits cast shadow over Tesla, SolarCity deal

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Opening sequence

Business

Lawsuits cast shadow over Tesla, SolarCity deal

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COMING UP:Lawsuits cast shadow over Tesla, SolarCity deal

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Transcript

00:00:02
>> Tesla CEO Elon Musk's plan to roll up his rooftop solar panel company, SolarCity, into his electric car business might be in trouble. Tesla saying Monday, lawsuits filed this month could delay the closing of that deal. The lawsuits allege that the board members of Tesla failed to look out for the best interest of the shareholders.
00:00:22
Musk is the largest shareholder in both companies. Reuters reporter, Liana Baker.>> I think a nightmare right now for people who are supporting this deal would be for any sort of delay or if this falls apart SolarCity is already burning cash so is Tesla. Some view this as kind of a bailout of SolarCity so who knows what SolarCity's future is as an independent company.
00:00:46
Certainly Elon Musk has talked about the need for this merger, and then he's always seen these companies as needing to be together so it definitely would be a blow to his ambition.>> Tesla has offered $2.6 biliion for SolarCity, about half of that company's value a year ago.
00:01:03
Tesla says the deal offers economies of scale in battery production but it comes at a time when Tesla is already challenged with ramping up car production. Tesla shares have dropped over 10% since the deal was announced early August. SolarCity shares have dropped about 35% in that period, extending those losses in Monday trading.