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Musk sees $1 trillion Tesla

Wednesday, June 22, 2016 - 01:15

Elon Musk says acquisition of SolarCity could eventually push Tesla's valuation to $1 trillion, but investors are skeptical. Fred Katayama reports.

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Elon Musk says his latest move could make Tesla worth $1 trillion in valuation, but investors sent shares skidding instead. Late Tuesday, the serial entrepreneur proposed combining two companies he partially owns: the electric car maker with the solar panel company run by his first cousin, SolarCity. Calling the deal valued at up to $2.8 billion a "no brainer," Musk says it would allow customers to do one-stop shopping for an electric car, home battery, and rooftop solar panels. Analysts fear a merger could make Tesla take its eye off of its main business of electric cars just when it's building a huge battery factory and trying to meet ambitious production goals. And Oppenheimer's Colin Rusch thinks it could spark a messy shareholder fight over corporate governance issues. (SOUNDBITE) COLIN RUSCH, SENIOR RESEARCH ANALYST, OPPENHEIMER, (ENGLISH) SAYING: "When you look at the Tesla board outside of Elon Musk, you know, four of those board members are significant shareholders of SolarCity. I think we've already seen a number of public calls for conflict of interest to be explored here." Shares of SolarCity shot higher, but Tesla shares dropped sharply. At one point it erased more than $4 billion in market value.

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Musk sees $1 trillion Tesla

Wednesday, June 22, 2016 - 01:15