Valuation Expert Finds Fault with Tesla/SolarCity Deal

I’m not the only one who thinks the combination of Tesla (TSLA) and SolarCity (SCTY) is “ludicrous“.  Aswath Damodaran, a Professor of Finance at NYU and one of the leading experts in corporate valuations, has taken a hard look at the valuation used by the bankers in order to justify the deal and come away outraged at the hijinks of the process.

In fact, it is far easier to make the case for reverse synergy here, since adding a debt-laden company with a questionable operating business (Solar City) to one that has promise but will need cash to deliver seems to be asking for trouble.

Source: Musings on Markets: Keystone Kop Valuations: Lazard, Evercore and the TSLA/SCTY Deal

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