NEW YORK (TheStreet) -- Shares of SolarCity (SCTY) were falling 9.90% to $18.61 on heavy trading volume mid-Thursday afternoon as a a lack of funding disclosed in a securities filing yesterday exacerbates concerns about the solar energy company's proposed $2.6 billion sale to Elon Musk's electric vehicles manufacturer Tesla (TSLA).
Musk is the chairman of both Palo Alto-based Tesla and San Mateo-based SolarCity.
The filing showed that Tesla must pay $422 million to its bondholders in the third quarter and will raise additional money by year-end in an effort to support the proposed acquisition.
It also revealed that 15 institutional investors recently decided against either purchasing SolarCity or inserting equity into the company, the Wall Street Journal reported. The company's cash has fallen to $146 million as of June 30 from $421 million a year earlier.
If the proposed merger doesn't close, SolarCity, which has $3.35 billion in debt, might not survive on its own, according to Bloomberg.
Shares of SolarCity and Tesla may also be under pressure after a SpaceX Falcon 9 rocket exploded during a test at Cape Canaveral Air Force Station Space Launch Complex 40. Musk is CEO of the Hawthorne, CA-based space company, and today's explosion marks the second time SpaceX lost a spacecraft in slightly more than a year, Bloomberg adds.
About 5.37 million shares of SolarCity have been traded so far today, well above its average trading volume of roughly 2.42 million shares per day.
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D.
SolarCity's weaknesses include its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.
You can view the full analysis from the report here: SCTY
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.