Come November, the United States will have a new President. November is also election month for Tesla and Solar City.
Shareholders of Tesla Motors and SolarCity Corp. will decide by November 17 if the two companies will undergo a merger or not. The combined worth of the two companies is estimated to be around $2.6 billion.
Tesla Motors, Inc., a company that manufactures electric cars and also dwells in energy storage, was founded July 2003 by a group that included Elon Musk. Musk now serves as its chairman and CEO while fellow founder JB Straubel is the CTO.
SolarCity Corp or SCTY.O was founded in 2006 by Lyndon and Peter Rive and now employs around 13,000 people. It provides clean energy services particularly solar power systems all over the United States. Musk, a cousin of the Rive brothers (their mothers are twin sisters), was the one who pitched the idea of starting a business related to solar power. Lyndon is the CEO while Peter serves as the CTO of SolarCity's. Musk currently serves as the company's chairman.
The brainchild of Musk, the merger has so far garnered mixed views from the shareholders and investors. Equity analysts are also on the fence whether the move will be good for both organizations. Four shareholders filed lawsuits to block the merger citing a breach of fiduciary duties by Tesla's board of directors. In the lawsuits, the plaintiffs argued that because Musk and other Tesla big names have shares in both companies, the executives are damaging the relationship between trustees and beneficiaries.
Under the merger, shareholders of SolarCity will automatically receive 0.11 shares of Tesla. This was already divulged when the companies filed with the Securities and Exchange Commission. The proposed merger was announced back in June. Tesla announced in a blog post that the company is anticipating the merger and already has plans lined up for them.