But Baron pointed out that the 2006 document
mentioned only a potential marketing
arrangement, not a full-fledged merger or
acquisition, between Tesla and SolarCity.
Baron repeatedly pressed Musk about evidence
that SolarCity had been in trouble — short of
cash, unable to obtain financing, in danger
of violating the terms of an existing loan
agreement — before the Tesla buyout.
Musk conceded nothing. He argued that
SolarCity could have raised money, if it wanted
to, by issuing shares of stock. And he noted
that fast-growing young companies, including
Amazon and Tesla itself, often bleed cash in their
early years before achieving success later.
Why, Baron asked, did another Musk company,
Space X, waive its own investment guidelines
to buy risky SolarCity bonds? Musk replied that
those bonds offered a better payout than did
bank accounts that paid little more than zero.