What's up guys and welcome back to wall street millennial, whenever someone creates a new disruptive technology, the entrenched establishment who profit off of the old system will try every trick in the book to discredit and disparage them. Nobody has been more victimized by this than tesla ceo and spacex founder elon musk. The corporate mission of tesla is to develop new green technologies and to accelerate the world's transition to sustainable energy sources. To this end, musk has created one of the most valuable companies in the entire world, creating billions of dollars for those who believed in the company's mission from the early days.

These gains have come at the expense of the legacy combustion engine automakers and fossil fuel companies, who have seen their stock prices stagnate over the same period. Over the years, tesla has seen countless attacks from short sellers and other critics who said that tesla was doomed to fail. The critics have come up with their most ridiculous line of attack. Yet a group of supposed shareholders sued elon musk over the company's 2016 acquisition of solarcity.

They claimed that musk inappropriately rammed through the acquisition to benefit himself at the expense of tesla's shareholders. Obviously, the claim that this deal harmed the shareholders is absurd. Tesla stock has more than 10x in value, since the acquisition was closed. Furthermore, elon musk's percentage stake in tesla was the exact same as a stake in solarcity.

At the time. Therefore, he only benefited from the acquisition to the extent that it created synergies and real value for all shareholders. The deal was also approved by the overwhelming majority of tesla's shareholders. On july 12, 2021 elon musk was forced to defend himself against this lawsuit in a delaware corps.

In this video we'll go over some of the most hilarious parts of this frivolous lawsuit and also show how the solar city acquisition sits perfectly in musk's master plan for creating the world's biggest vertically integrated renewable energy company in 2016, tesla announced it would acquire solarcity in An all stock transaction, valued at 2.6 billion dollars, solarcity sells and installs solar panels for residential commercial and industrial customers. At the time, elon musk owned a 22 stake in solar city and a 22 stake in tesla solar city was losing money as they lacked the necessary scale and technology to make the business profitable. Musk saw an opportunity to acquire the company in a transaction that would create billions of dollars of value for both companies. Tesla had already developed the power wall, which allows homeowners to store electricity generated by the roof mounted solar panels with the acquisition of solar city.

Tesla. Can vertically integrate the process? Tesla can install the solar panel onto the roof which charges the tesla power wall, which can charge a tesla electric car by bringing the solar installation in-house. They can create efficiencies by better coordinating its installation with the power wall. This acquisition fits perfectly within must's master plan of creating a vertically integrated renewable energy company and also fits in with their plans to eventually make a smart home because musk owned a 22 stake in solar city.

There was a potential conflict of interest as he benefited from the transaction. However, he also had a 22 stake in tesla at the time, so he would only benefit from the deal if all tesla shareholders benefited other tesla shareholders also recognized the benefits of the deal. 85 percent of non-controlling shareholders voted to approve the deal. Non-Controlling shareholders exclude those who hold management positions in either company such as elon musk.

In 2017, a group of institutional investors sued the tesla board of directors and elon musk, saying the solar city acquisition was a bailout of a related party company and not in the best interest of tesla shareholders. They claim that solarcity was on the brink of financial collapse and musk bailed them out and overpaid for the acquisition in the years following the acquisition. Tesla's solar unit didn't do very well. This is because they were in the midst of model 3 production hell, which was soaking up the entirety of tesla and elon musk's bandwidth.

Now that model 3 production is running smoothly, the company will double down on the solar division and will likely become a key growth area for the company in the coming years. Tesla's board of directors caved in and agreed to pay 60 million dollars, but didn't admit any wrongdoing. Elon musk refused to give in to their extortionary demands and took the case to court. The acquisition was approved by 85 percent of shareholders.

So the idea that it was improper is absurd. It was a completely legitimate acquisition, just like the hundreds of other ones that take place in the corporate world every year, tesla went through all the proper channels and the deal was approved by tesla's independent board of directors. The court proceedings were not broadcast, but some of the key excerpts were reported by journalists in the room. Musk had some heated exchanges with the plaintiff's lawyer, randy barron.

He said to baron. I have great respect for the court, but not for you, sir unquote, since baron didn't have any legitimate legal ground to stand on. He resorted to personal attacks against musk. He tried to paint musk as irresponsible.

He pointed out the fact that he recently changed his official title within the company from chief executive officer to techno king of tesla. This title was meant to reflect his deep involvement within tesla's product design and innovation, while most ceos sit at their desk all day. Reading reports and talking to wall street musk gets his hand dirty with the factory floor. He is in contact with the engineers personally devising new ways to increase production efficiency.

Tesla's cfo zach kirkland also changed his official title to massive coin. This reflects the company's use of bitcoin as a treasury asset. Tesla's critics use these title changes to say that musk is an irresponsible and unprofessional leader. His antics may appear erratic to a casual observer, but everything he does is carefully calculated to further tesla's mission of accelerating the transition to electric vehicles and sustainable energy.

His social media antics build tesla's brand awareness, which ultimately creates more demand for their cars. He is highly effective at doing this, as evidenced by his twitter account, which boasts nearly 60 million followers for comparison. Ford's ceo, jim farley's, twitter account has 42 000 followers less than 1 1000 of musk. The motivation behind the lawsuit is also quite strange.

The plaintiffs are filing the lawsuit on behalf of all tesla shareholders. In the extremely unlikely event, the court sides with the plaintiffs. Any settlement that must pay would go to tesla, not the plaintiffs. Tesla's current market cap is 629 billion dollars, even if musk is forced to pay the entire value of 2.6 billion dollars.

This would only amount to 0.3 percent of the market. Cap and 22 of this value would accrue to musk based on his ownership stake. If the plaintiffs really are tesla shareholders, their motivation is very questionable. It's most likely just a publicity stunt and a sad attempt to waste a few days of elon's time in court.

In hindsight, the solar city acquisition turned out to be a major success. Musk says the energy and solar business could eventually grow to be even bigger than the car business or at least on the same order of magnitude, and their recent results appear to back up this claim. In the first quarter of 2021, tesla deployed 92 megawatts of solar power, which represents a 163 increase over the prior year. The growth in solar deployments also sets them up favorably to create a tesla connected home.

This would give them a tremendous opportunity to develop more products to connect into the home, such as the tesla hvac, which musk has talked about for a long time. Alright, guys that wraps it up for this video. What do you think about the tesla lawsuit? Do you think the plaintiffs have legitimate concerns, or is it just a frivolous waste of time? Let us know in the comments section below also, if you want to support this channel, consider becoming a channel member members get access to our backlog of videos before they release to the general public. The backlog can be viewed by members in the community.

Tab of the youtube page, as always. Thank you so much for watching and we'll see you in the next one wall, street millennial, signing out.