Tesla Buying Solar City is “Ludicrous”

We all know Tesla (TSLA) CEO Elon Musk is a genius, but the strategy of combining two money losing, cash burning businesses together to get scale and synergy is ludicrous.

Last year Tesla burned through $2.1 billion in losses and capital expenditures.  Adding Solar City’s (SCTY) cash burn rate of $2.4 billion to the company, which Musk is proposing to do, just makes Tesla a bigger money losing business with profitability pushed even further into the future.  Warren Buffet has said that it is better to buy a good business at a fair price than to buy a bad business at a good price, with the purchase of Solar City, Tesla is getting neither a good business or a fair price.

Tesla and Elon Musk are truly operating in “Ludicrous” mode.

Musk Fails to Assure Investors Rattled About SolarCity Takeover

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