Instead, they expressed skepticism that the electric car maker would be able to combine the two companies without putting a dent in Tesla's finances — something Musk promised just hours after the proposal was announced.
"We don't expect SolarCity to have a negative impact on Tesla cash flow," Musk said on a call with analysts Wednesday morning. "This makes execution easier, not harder."
Tesla shares dropped 8 percent in morning trading Wednesday, as analysts questioned how that could be true given both companies are already struggling to prove they can turn a profit.
At the lows of the morning Tesla had lost nearly $3.2 billion in market capitalization — more than the $2.8 billion bid for SolarCity.
"The combined entity is likely to magnify the losses and cash burn that both were seeing individually," Barclays analyst Brian Johnson told investors.
By combining Barclays' earnings estimates for both companies, Johnson predicts an acquisition would lead to non-GAAP pretax losses of $1.3 billion in 2016, and $1.4 billion in 2018. More troublesome, the analyst said, is the firm's estimated cash burn for the combined companies, which it pegged at $2.8 billion in 2016 and $2.4 billion in 2018. The two companies would also have a combined net debt of $2.5 billion, Johnson said.
"In funding SolarCity's losses, it further reinforces our view Tesla will need to return to the capital markets for additional capital infusions," Johnson told investors.