SolarCity-Tesla Merger Could Be Saved By Elon Musk's Reputation
When Tesla Motors Inc (NASDAQ: TSLA) offered to acquire SolarCity Corp (NASDAQ: SCTY), many analysts immediately opposed the deal. One of the more notable Tesla bears, Ronnie Moas of Standpoint Research, blasted Tesla's offer as being a "bail-out" for the solar company that just 24 hours prior was on "life support."
The final approval of Tesla's acquisition must come from the companies shareholders. According to The Wall Street Journal, Tesla's large shareholders has a history of throwing their support behind the company's CEO Elon Musk.
WSJ pointed out that among the seven largest Tesla shareholders, six have owned the stock for at least three years, which is long enough to be sitting on a hefty return.
Excluding Musk's personal stake in Tesla, the same seven shareholders own over two-thirds of Tesla's stock.
Related Link: Tesla Downgraded By Morgan Stanley, Cuts Target By ; Rated Overweight Since 2012
One of the largest shareholders, Fidelity Investments, already threw its support behind a potential acquisition of a solar company as it would make a sound strategic fit with Tesla's own technology.
Musk won't be voting on the proposal given his large stake in SolarCity, but that hasn't stopped him from voicing his support for the deal. He even went as far as to suggest a combined Tesla and SolarCity entity could be worth $1 trillion.
See more from Benzinga
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
