• by Thom Forbes  @tforbes, August 2, 2016

Pending shareholder approval, Elon Musk’s vision for an overarching clean-and-sustainable energy company took a big step toward fruition yesterday when Tesla Motors announced that it had reached an agreement to acquire SolarCity. Musk is CEO of the former, chairman of the latter and the largest shareholder of both. 

The $2.6 billion offer, including assumption of debt, is “about half of SolarCity's value a year ago, a tumble reflecting the solar company's slowing growth, complex financial structure and the increased scrutiny of government incentives for rooftop solar,” write Reuters’ Paul Lienert and Liana B. Baker.

“For Tesla, acquiring SolarCity offers the promise of greater economies of scale in electrical energy management systems, battery production and marketing, tempered by the near-term challenge of managing a high-risk ramp-up of vehicle production and a merger simultaneously,” they point out.

The deal, which is about enormous potential more than present performance, clearly comes with risk.

“In a few years, everyone will know whether the planned merger ... became a rousing tale of ambition and success or went down as one of biggest busts in business history,” write Russ Mitchell and Samantha Masunaga for the Los Angeles Times. 

“Far more incredible than Elon Musk’s various plans to power our homes, cars and, perhaps one day, spaceships and hyperloops, are his powers of persuasion,” observes Spencer Jakab for the Wall Street Journal. 

His original proposal in June “went down like a lead balloon at the time. But Mr. Musk’s insistence that it was the ‘obvious thing to do,’ even as he recused himself from the negotiations because he owns more than a fifth of each company, seemed to carry the day.”

Indeed, “Musk has thrown the full force of his persuasive personality behind the acquisition. But Tesla said the independent board members of both companies voted to authorize the deal, meaning Musk did not cast a ballot,” writes Nathan Bomey for USA Today. “A majority of each company's independent shareholders must also vote to approve the acquisition, which Tesla expects to close in the fourth quarter.”

Calling the effort “the machine that builds the machine,” Musk told analysts on a conference call that “Tesla is making breakthroughs in manufacturing processes that will shrink the amount of space needed to build parts by two-thirds, improving quality and the capital needed for a specific output. After the combination, SolarCity will share in those improvements,” Reuters’ Mitchell and Masunaga report.

In the New York Times, Leslie Picker and Bill Vlasic offer conflicting points of view from two analysts. 

“I don’t know why people would be voting in favor of it,” says Standard & Poor’s Global Market Intelligence chief automotive analyst Efraim Levy. “The valuation is excessive given the current prospects and the time horizon we’re looking at.”

But the story ends on a high note. “Many analysts are still optimistic that, despite the risks, the deal will ultimately get done,” they write.

“Everything about Elon is for the long term,” says Morningstar analyst David Whiston. “I suspect the big, institutional shareholders understand that and they’re all in on Elon, and I expect the large shareholders will vote yes for the deal.”

And there’s nothing wrong with betting on the long-term, some say.

“Putting aside [CNBC’s “Mad Money” host Jim] Cramer's description of Elon Musk's attitude as ‘I'm smarter than you and I can't bother with you,’ he actually found logic in the Tesla Motors CEO's long-term vision for the solar industry,” observes CNBC’s Abigail Stevenson.

The deal “showed Cramer that Musk isn't playing for this year or even next year. Investors that buy SolarCity must believe that the electric grid will fundamentally change in the next decade, he said.”

“You have to think big to understand his plan. Or, maybe we just can't understand it because Musk is such a visionary, something I hate to say because I haven't seen a lot of visionaries,” says Cramer.

Now combine that big thinking with the Didi Chuxing deal for Uber yesterday and you have “signals that the vicious skepticism that has held down the longer-term growth stocks could be coming to an end.”

Say what? An end to quarter-to-quarter thinking? We’ll believe it when our autonomously driven vehicle drops us off at our Powerwall-powered abode … on Mars.