Elon Musk seems to have made a reverse on his decision to make Tesla private. The CEO of the electric car company revealed in a recent statement that investors have persuaded him not to follow up on his plans to privatize the company.
In a statement made by the unpredictable CEO, his decision to keep the company public is based on feedback from shareholders; who said they have internal rules limiting how much they can sink into a private company.
The statement also said that the business magnate met with Tesla’s board of directors on Thursday and informed them of his new decision, with the board indicating that they agree.
Staying Public https://t.co/gUrAnInBOu
— Tesla (@Tesla) August 25, 2018
Elon Musk’s Private Dream
In an earlier event, Musk shocked the company’s board and investors when he tweeted on Aug. 7 about his intentions to take the company private.
He said in his tweet that funding was already secured for the deal; but it was later revealed by the company that talks were still only in progress with Saudi Arabia’s Public Investment Fund.
The tweet also said that the electric company would offer shares at $420. Which as of Aug. 6 closing date was higher by 23 percent.
Assuming all the shares were bought, the said deal would be around $72 billion; though Musk later said he was expecting not more than one-third of the stakeholders to agree to the buyout.
The unexpected tweet posted by Musk on his way to the airport has triggered investigations from the federal government. The U.S. Securities and Exchange Commission are reportedly probing whether Musk was deliberately attempting to manipulate stock prices.
Musk’s statement initially sent the company’s stock price soaring but it has since fallen.
In his new statement, Musk said he talked to investors and consulted investment powerhouses Goldman Sachs, Morgan Stanley and Silver Lake to carefully examine all his options:
“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.”
He went on to add that his belief that Suadi Arabia’s Investment fund could provide the billions of dollars necessary to take Tesla private was “reinforced during this process.”
What Now For Musk And Tesla?
Elon Musk may have put an end to his idea to take Tesla private, but still has a tough road ahead to meet profitability and production projections, especially as Tesla handles investigations and lawsuits stemming from his ridiculous “funding secured” tweet.