San Francisco, Aug 25 :In a dramatic U-turn, Elon Musk said that he has given up on his plan to take Tesla private.
In a statement late Friday night, Elon Musk, the electric-car maker’s chief executive, said he and the company’s board had concluded that they would not turn Tesla into a privately owned company.
“I knew the process of going private would be challenging, but it’s clear that it would be even more time-consuming and distracting than initially anticipated,” Musk wrote in a statement that Tesla posted on the company’s blog shortly after 11 p.m.
Tesla Chairman and CEO Elon Musk On August 7 surprised the investment world with a Twitter announcement that he was considering taking Tesla private and that the funds needed to do so were “secured”.
Musk’s tweet caused a financial firestorm with Tesla shares immediately skyrocketing. But in later days, they lost a good part of what they had gained and tanked further over the confusion which way Tesla might go.
“Almost all have stuck with us from the time we went public in 2010, when we had no cars in production and only a vision of what we wanted to be.
“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.
This came after Musk had discussions with existing shareholders and financial advisors and learned that there was little appetite for such a move.
“Additionally, a number of institutional shareholders have explained that they have internal compliance issues that limit how much they can invest in a private company. There is also no proven path for most retail investors to own shares if we were private,” said 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’,” he added.
Since the Musk announcement came over the weekend, its impact on Teska stock will only be visible when the US market reopens on August 27.
Musk said he worked with investment firms like Silver Lake, Goldman Sachs and Morgan Stanley to consider the many factors that would come into play in taking Tesla private.