Musk says investors persuaded him to keep Tesla public
DETROIT — Electric car and solar panel maker Tesla Inc. will remain on the public stock exchanges after CEO Elon Musk said 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.
Musk met with the company’s board on Thursday to tell them he thought the company should stay public and the board agreed, according to the statement.
In an Aug. 7 post on Twitter, Musk wrote that he was considering taking Tesla private. He said it would avoid the short-term pressures of reporting quarterly results. The tweet said funding had been secured for the deal, but the company later said the details still had to be worked out with Saudi Arabia’s Public Investment Fund.
The tweet said Tesla would offer $420 per share, 23 percent above the Aug. 6 closing price. If all the shares were bought, the deal would be worth $72 billion. But Musk later said he expected only one-third of stakeholders to agree to the buyout. Shares shot up 11 percent the day of the tweet, but they have since pulled back, closing Friday at $322.82
The bizarre tweet brought an inquiry from the U.S. Securities and Exchange Commission, which reportedly is looking into whether he was trying to manipulate the share price. Short-sellers, who bet against a company’s success, complained that Musk was trying to hurt them.
Musk said he worked with investment firms Goldman Sachs, Morgan Stanley and Silver Lake to consider all the options, and he talked to investors.
“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,” Musk wrote.
At least two lawsuits have been filed against Tesla on behalf of shareholders alleging Musk broke the law with his tweet.