My firm, SpringOwl Asset Management, shorted Tesla(TSLA) - Get Report stock Wednesday morning after Tuesday night's news that the company made an offer to purchase SolarCity (SCTY) for $2.8 billion.

We see no obvious synergies between SolarCity and Tesla. One sells solar panels to retail customers. One sells electric cars.

Elon Musk appears to be motivated to use Tesla's stock as a currency to absorb SolarCity as he has $475 million in loans securitized by Tesla and SolarCity stock, as detailed by The Wall Street Journalin April. Tesla has previously warned investors that if its stock price declined, Musk could be forced to sell more of his stock in Tesla to raise money in a margin call to cover his personal loans.

Musk owns just under 22% of SolarCity's stock, which is down 63% in the last year. SolarCity's stock has been a popular short by many hedge fund managers. As of Tuesday, 49% of SolarCity's float was held short. It's not clear if SolarCity's stock price was headed for more declines in the months ahead, but with this proposed acquisition Tesla effectively puts a collar on the value of Musk's SolarCity shares.

We don't think an acquisition, which appears to be more motivated by self-interest over corporate goals that serve Tesla, is appropriate corporate governance. If the Tesla board believes this acquisition serves their interests, why didn't they choose to buy SolarCity years ago before its initial public offering, when its valuation was much cheaper?

We can't imagine that the many Tesla shareholders who bought into the $2 billion secondary offering a few weeks ago would be happy to know that most of that money raised will be going towards absorbing SolarCity.

After Musk, the biggest holder of Tesla (11%) and SolarCity (15%) is Fidelity. According to the after-hours reaction Tuesday in both companies' share prices, Fidelity's stake in SolarCity increased in value by $47 million, but its stake in Tesla dropped in value by $440 million. Fidelity's collective investment in the two companies is down $400 million. Its interests have not been served by this deal.

The Wall Street Journal article from April also detailed how SpaceX was the largest purchaser of SolarCity's solar bond offering in March. SpaceX bought $90 million of the $105 million offering. SpaceX has also been a popular buyer of these SolarCity bonds in the past.

We don't think it's appropriate for different business entities, whose only connection is their founder, to be able to raise money from outside investors and then invest that money -- presumably raised to help fund the operations of that business -- in another business of the founder. If we are going to give Donald Trump a hard time for using campaign money to pay entities affiliated with him, we need to do the same with a beloved tech visionary.

At SpringOwl, we criticized out-of-touch CEOs like Marissa Mayer of Yahoo! (YHOO) for needlessly spending company money on holiday parties, exorbitant employee retention packages, free organic food and needless expensive acquisitions. That company is now on the verge of being sold six months later.

We took Philippe Dauman of Viacom(VIAB) - Get Report to task for raking in $71 million in total compensation last year when his stock price has dropped nearly 50% in value over two years. We demonstrated how Dauman had hollowed out a once thriving creative culture. He has now been removed from his board six months later.

We cannot let this latest proposed transaction of Tesla buying SolarCity to go by without registering our disapproval by shorting Tesla's stock.

It's important to acknowledge the acquisition requires the acceptance vote of both sets of shareholders, which may or may not happen given the drop in Tesla's shares on this news. It is probably more likely than not that it won't go through given the stock decline.

If Tesla's board sees this use of capital as optimal, we believe there is much more pain ahead in the coming months for Tesla shareholders.

Editor's Note: This article was originally published at 8:33 a.m. EDT on Real Money on June 22.

At the time of publication, Jackson was short TSLA and long YHOO and VIAB.