SolarCity: Tesla's Solar Boondoggle

Boondoggle (noun): work or activity that is wasteful or pointless but gives the appearance of having value.

It's hard to argue Tesla's (NASDAQ: TSLA) acquisition of SolarCity has been anything but a boondoggle of epic proportion. In less than a year, Tesla has shrunk SolarCity's business, laid off thousands of installers, and scrapped most of the company's manufacturing plans. In its latest round of layoffs, Tesla was reportedly targeting more of the SolarCity operations as the wind-down of solar operations continues.

The logic of the buyout never made much sense in the first place, unless you looked at the hundreds of millions of dollars Elon Musk, Peter Rive, and Lyndon Rive would lose in stock and bond value if SolarCity went under. This is looking more and more like a bailout and Tesla may eventually have to take a massive loss on solar operations.

Source: Fool.com