Musk makes a U-turn, keeps Tesla public
detroit — Electric car and solar panel maker Tesla Inc will remain on the public stock exchanges after CEO Elon Musk said on Friday that investors have convinced him the company shouldn’t go private.
The eccentric and sometimes erratic CEO wrote in a late-night statement that he made the decision based on feedback from shareholders, including institutional investors, who said they have internal rules limiting how much they can sink into a private company.
The Tesla chairman met the electric car and solar panel company’s board on Thursday to tell them he thought the company should stay public and the board agreed, according to the statement. —
san francisco — Elon Musk scrapped his plan to take Tesla private, a remarkable reversal more than two weeks after blindsiding employees and investors with the idea in a bombshell tweet.
In a blog post published late on Friday, Tesla’s chairman, CEO and largest shareholder said he had met with the board and “let them know that I believe the better path is for Tesla to remain public. The Board indicated that they agree”.
The about-face ends speculation about how Musk would raise money to take Tesla private, but it’s unlikely to ward off scrutiny of the maverick CEO’s actions. Musk’s August 7 tweet that he wanted to take the electric-car maker private at $420 a share and had “funding secured” sent the shares soaring before it became apparent he didn’t have financing lined up.
The episode led to a subpoena from the US Securities and Exchange Commission, according to a person familiar with the matter. Musk’s behaviour, including a tearful interview with the
that touched on his lack of sleep, has led to calls for Tesla to hire a chief operating officer to help reduce stress on the CEO. Musk, who also runs the rocket-launching company SpaceX and a tunneldrilling outfit called The Boring Co, is busy trying to ramp up Tesla’s production of the Model 3 sedan and make the company profitable in the second half of the year.
In an August 13 blog post, Musk indicated that he believed based on conversations with Saudi Arabia’s Public Investment Fund that he had financial support to go private. In his blog post on Friday, Musk reiterated his “belief that there is more than enough funding to take Tesla private” but said a transaction would be distracting and take too long.
“Given the feedback I’ve received, it’s apparent that most of Tesla’s existing shareholders believe we are better off as a public company,” wrote Musk. “Although the majority of shareholders I spoke to said they would remain with Tesla if we went private, the sentiment, in a nutshell, was ‘please don’t do this.’” —