Jim Cramer: SolarCity Deal a Drag on Tesla

Investors that share Tesla (TSLA) - Get Report CEO Elon Musk's long-term vision may applaud his SolarCity (SCTY) purchase, but it will weigh on Tesla shares, says TheStreet's Jim Cramer. SolarCity agreed to a $2.6 billion takeover deal from Elon Musk's electric car company this week. SolarCity stockholders will receive 0.110 Tesla common shares for each SolarCity share, valuing SolarCity common stock at $25.37 a share based on the five-day volume weighted average price of Tesla shares as of July 29. The deal is expected to close in the fourth quarter. The combined company would be 93.5 percent-owned by Tesla shareholders and 6.5% by investors in SolarCity.

At the time of publication, Jim Cramer's charitable trust Action Alerts PLUS held no positions in stocks mentioned.