Elon Musk loads up on SolarCity shares after short-seller Jim Chanos slams the stock
Musk, the company's chairman, spent $50 million on 123,519 shares of SolarCity at around $40.48 per share, according to a securities filing.
Musk currently owns 20,805,082 shares. SolarCity closed up $3.62, or 8.83%, to end the day at $44.61 per share.
Most of the market got clobbered.
Chanos, the founder of Kynikos Associates, revealed last week on CNBC's "Halftime Report" that he is shorting SolarCity.
Chanos thinks SolarCity's business model is similar to that of a subprime financing company.
"And the residential model, I'd like to point out - SolarCity is really a subprime financing company in effect. You basically lease the panels from SolarCity. They put them on your house and they collect the lease payments. So in effect, if you put on the panels you have a second mortgage on your home because you hope it's an asset, but in many cases it turns into a liability," Chanos said.
SolarCity installs solar panels on residential and commercial buildings. The company was founded by Peter and Lyndon Rive. Musk is their cousin.
In a telephone interview on Friday, CEO Rive said that said Chanos' subprime analogy is "dramatically wrong" and that he's "intentionally misleading people [by] saying it's subprime."