Everyone Despises SolarCity Deal, Except Tesla Shareholders

It’s an understatement to say Tesla Motors’ proposed $2.6 billion takeover of SolarCity has been the most reviled deal of the year. Corporate governance experts are up in arms, because Tesla’s visionary founder, the entrepreneur Elon Musk, also founded SolarCity and is the largest shareholder in both companies. SolarCity’s chief executive is Mr. Musk’s cousin. There are overlapping directors. Critics called it blatant self-dealing and accused Mr. Musk of using valuable Tesla shares to bail out a struggling SolarCity. James S. Chanos — an investor who, it should be noted, is betting against both stocks — called it a “shameful example of corporate governance at its worst.”

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