Elon Musk Defends Tesla’s $2.6 billion Acquisition of SolarCity in Lawsuit

Tesla’s CEO and founder Elon Musk started his week off by testifying in court on Monday in a shareholder lawsuit over the company’s $2.6 billion acquisition of SolarCity.

Musk admitted in his testimony that he did not see a financial gain from the acquisition and argued that there was no controlling pressure on the deal.

In 2016, Tesla shareholders had alleged that the deal amounted to a SolarCity
bailout, suing Musk and his fellow board members. The Tesla board members settled in late 2020 for $60 million but Musk opted to take the fight to court.

Musk’s testimony began just after 9:20 a.m. ET on Monday and was the beginning of what shoold I be a two-week trial in Wilmington, Delaware.
The trial is in front of Vice Chancellor Joseph Slights in the Delaware Chancery court.

Musk has said in his testimony that the acquisition did not amount to a bailout. He also said he didn’t put pressure on fellow board members.

The Tesla CEO could stand to pay upwards of $2 billion if he loses. In this case, known as a shareholder derivative action, the suit is filed by investors on behalf of a corporation. This means if the plaintiffs win, proceeds may go to Tesla and not to the stakeholders who brought the suit.

“Since it was a stock-for-stock transaction and I owned almost exactly the same percentage of both there was no financial gain,” Musk told his attorney on the stand. Musk said he didn’t control the appointment of board members, their removal or their compensation.

He even admitted that he didn’t even want to be in control of a company.
“I tried very hard not to be the CEO of Tesla,” Musk said. “I don’t like being the boss of anyone,” he added.

Musk said the SolarCity deal was part of his “master plan,” written in 2006. It was meant to accelerate the advent of sustainable energy.

“I have absolute faith that Solar City would have been able to raise money independently,” Musk said after more than six hours in court.

Musk is expected to resume his testimony Tuesday morning.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.