Tesla chief says automaker will stay public

Tesla will remain a public company, CEO Elon Musk said on Friday in a statement posted on the Tesla website.

Musk said on Twitter earlier this month that he was considering taking the Palo Alto electric carmaker private and had “funding secured” for a transaction that would take Tesla private at $420 a share. He later said Saudi Arabia’s sovereign wealth fund was in talks to take the company private.

Those plans were dropped after shareholders told him Tesla would be better off as a public company, Musk said. Institutional investors told Musk that compliance rules would prevent them from holding large stakes in Tesla if it went private.

The process of going private would also be “more timeconsuming and distracting than initially anticipated,” he said.

“This is a problem because we absolutely must stay focused on ramping Model 3 and becoming profitable,” he said.

Musk said Tesla’s board supported remaining publicly held.

Tesla’s stock initially soared after Musk said the company might go private, but quickly plunged after Musk disclosed his emotional struggles running the company in an interview with the New York Times.

The Securities and Exchange Commission reportedly is investigating Musk’s statements about taking Tesla private.

Roland Li is a San Francisco Chronicle staff writer. Email: roland.li@sfchronicle.com Twitter: @rolandlisf