The Hustle

🍃 Musk sued over SolarCity

The Hustle - Silicon Valley Tech News


July 13, 2021

{date(‘MMMM dd, yyyy’,time(“now”))}

Reports are growing of Tesla owners dropping thousands to repair their cars after falling victim to rats chewing on soy-based wiring insulation. Apparently, the problem isn’t unique to Teslas.

The big idea

Musk defends Tesla’s acquisition of SolarCity (Source: CNBC)

Musk in court over Tesla’s $2.6B acquisition of SolarCity

In 2016, Tesla acquired SolarCity — a solar roof installation business — for $2.6B.

For years, the acquisition has been criticized as self-dealing by Tesla CEO Musk and his family.

And, on Monday, Musk went to court to defend the transaction.

At the time of the deal…

… a number of red flags were raised, per CNBC:

  • SolarCity was founded by 2 of Musk’s cousins (Lyndon and Peter Rive)
  • Musk owned 22.1% of Tesla and 21.9% of SolarCity
  • SpaceX (also founded by Musk) had invested $255m in SolarCity bonds in prior years

Tesla shareholders sued Musk and other board members, charging that the acquisition was a “bailout” of a struggling SolarCity. Another plaintiff settled for $60m last year, but Musk chose to fight it.

Tesla and SolarCity…

… are an ideal pairing, per Musk’s take. Both are looking to usher in a clean energy future.

In a perfect world, Tesla owners can charge their cars from electricity generated by the SolarCity solar panels installed on their roofs.

According to CNBC, SolarCity’s post-acquisition record is mixed: It repeatedly delayed manufacturing solar tiles but sold a ton of energy storage products.

Did Musk ‘control’ the transaction?

That is the key question, per The Wall Street Journal. In court, Musk argued he didn’t have any undue pressure on the deal (85% of Tesla shareholders agreed to the transaction).

Musk could pay $2B+ to Tesla itself if he loses the case and the presiding judge finds that SolarCity “wasn’t worth anything,” per WSJ.

As the world’s 2nd richest person ($183B), Musk can probably handle the hit… we just hope this outfit from his Wario SNL skit makes an appearance:

SNIPPETS

Formula E charged through the pandemic. The young all-electric racing series nearly turned a profit last year on €143m in revenue, despite race cancellations and crowdless events. #clean-energy

The best way to predict the future is to create it. Steph demystified just how easy it is to overlook what’s coming when you’re in the passenger seat. #hustle-picks

That’s a lot of coin to flip. Indian ecommerce giant Flipkart raised a $3.6B funding round, more than any Indian startup in history, at a $37.6B valuation. #fintech-cryptocurrency

“Big Techie” Microsoft had to go really small. The company reportedly went door to door swapping out routers hacked with Trickbot malware in Brazil and Latin America in an attempt to stop a hacking group. #big-tech

Let’s get “phygital.” Brookfield Properties — armed with 150m+ square feet of retail space across 100+ locations in 42 states — is teaming up with The Aria Network to develop in-person AR ad experiences. #ecommerce-retail

People are that impatient? Google announced a new feature called “play as you download” that will halve the time between downloading a game from the Google Play store and actually playing it… even before it’s all done downloading. #emerging-tech

Can’t leave these texts on read: WhatsApp was hit with a volley of complaints over its recent privacy update by the European Consumer Organisation, who says it’s wrongfully pressuring users to opt in. #privacy

Crypto Haven

Source: Three Lions / Getty Images

Passports for people who don’t want to pay crypto taxes?

Tax evasion = illegal. But what about tax avoidance?

Plan B Passport will sell you a passport to your choice of 7 destinations — including tropical islands like St. Lucia or Grenada — but not for the weather.

It’s to escape capital gains taxes on crypto earnings

Plan B was founded by Russian expat (and ex-sailboat racer) Katie Ananina, 26, who told CNBC that she “was smart enough to figure out that $200 in bitcoin will be worth $100k at some point” and doesn’t think the government should get a big cut.

Plan B works with each country’s residence or citizenship-by-investment program.

Typically, clients donate between $100k-$150k plus fees to obtain citizenship in a matter of months.

The US taxes crypto like property or stocks

Whatever you sell your bitcoin for — minus what you paid for it — is eligible for capital gains tax. The short-term (held for 1 year or less) rate is 10-37%, while the long-term is 0-20%.

Expats would still be on the hook for capital gains tax…

…if they kept their US citizenship, but not if they denounced it. Which is exactly what Ananina says some American clients are considering. Uncle Sam also charges an exit tax, but it could still be worth it for some.

Experts estimated Facebook co-founder Eduardo Saverin saved $700m when he ditched the US for Singapore — though he’s denied that’s why he moved.

Meanwhile, the IRS has been looking for unreported crypto under a name that sounds way more exciting than it is: Operation Hidden Treasure.

By the Numbers

“It’s a me…a Mario!” (Soure: GameRadar)

Digits: Icelandic workers, an art critic’s epic smackdown, and Toyota’s tiny win

  1. Days after a rare version of The Legend of Zelda grabbed $870k at auction (a record), a pristine copy of Super Mario 64 said “It’s a-me!” and took home $1.56m.
  2. New York Magazine’s senior art critic Jerry Saltz turned down a $250k exclusive deal from Substack, more than twice his current salary.
  3. Between April and June, Toyota sold US consumers 577 more cars than GM for a grand total of 688,813. It was a first for Japanese manufacturers (though GM is probably hoping it’ll also be the last).
  4. Pre-made guac sales totaled ~$585m in the US in 2020. (National Avocado Day is July 31, for those unaware.)
  5. 86% of Iceland’s workforce is livin’ it up working shorter hours or will be able to, following the release of findings from a multiyear workforce study and subsequent union negotiations.
  6. Marvel’s Black Widow bagged $60m+ in sales on Disney+. Not too shabby for the streaming service, given it saw $80m in domestic box office sales and $78m internationally.
TRENDS

A lil’ something for everyone…

In case you missed it, here at Trends we’ve been hosting a ton of events for our community.

We’ve done in-person meetups, mixers on different continents, and virtual events like:

  • Business idea speed dating
  • Chess night
  • A digital seminar on DeFi
  • And much more

And we’re just hitting our stride.

If you’re not already a member of Trends, try 1 week for just $1 to get full access to all community events.

Come say hi, and we’ll see you on the inside.

Get Access →
Parody of the day

These coulda been contenders (Source: TechCrunch / MSCHF)

Viral internet group MSCHF — which once took over The Hustle’s email — just released a set of collectibles… of failed startup ideas.

You can buy these limited-time “Dead Startup Toys,” including some epic fails:

  • Theranos Mini-Lab: “A multi-billion medical startup built upon falsified test results and flagrantly deceptive malpractice.”
  • Coolest Cooler: “An over-specced combination cooler / speaker / blender that failed to deliver so thoroughly it was investigated for fraud.”
  • Juicero: “An $800 I.O.T. juicer ultimately outperformed by literally squeezing the vegetables with your hands.”

Not gonna lie: We kind of believed the hype of the Juicero when it first came out…

Giveaway
Personalize Your Snippets →

(It takes less than 30 seconds to get a shot at winning!)

We’ll be giving away 100 hoodies, t-shirts, caps and stickers to 25 lucky winners this week.

P.S. Already personalized your Snippets? You’ll be entered to win too.

P.P.S. Want more Hustle swag? Go here and share your referral link.

Ends 7/16/21. Void where provided. Only U.S. or residences are eligible to win. No purchase necessary.

How did you like today’s email?

Join 1.5m+ professionals getting The Hustle daily news brief

Business and tech news in 5 minutes or less

100% free, no ads or spam, unsubscribe anytime

Exit mobile version