NEW YORK (TheStreet) -- Shares of Tesla (TSLA) were lower and shares of SolarCity (SCTY) were higher in mid-afternoon trading on Friday, the day after shareholders of both companies overwhelmingly approved the $2.6 billion merger that Tesla CEO Elon Musk notably made a hard push to get passed. Some investors are worried about the effect the cash burn rate of SolarCity will have on Tesla.
Each company has a high cash burn rate, so their combined rate is "just amazing," Bloomberg News' Cory Johnson said on "Bloomberg Markets: Americas" on Friday afternoon. "It's like a tire fire of burning cash flow."
If Wall Street decides not to fund these companies anymore, then they will run out of cash, Johnson noted. However, Musk has had a high success rate of getting his businesses funded by Wall Street as investors buy into his vision.
Another concern is that Tesla cut back significantly on the spend it put into building factories last quarter, yet it needs those factories in order to build more products to earn more money, Johnson explained. Those factories are important for Tesla so it can make the batteries it needs to put into its electric cars.
But the stock seems to be okay because it's the "greatest definition of a story stock," or a stock where the story trumps the numbers for investors, Johnson said. "This is a stock where people believe the management despite the free cash flow numbers and everything else that they put up. They believe that someday there's going to be a better future out there and Tesla and SolarCity are going to bring it."