Tesla CEO and Board Announce Company Will NOT Go Private [News]

It appears Tesla will remain a public company for the foreseeable future.

[Photo: Tesla]

Earlier this month, Tesla CEO Elon Musk indicated that he may take the company private.

Musk aimed to make Tesla less susceptible to market forces and put more power in the hands of the shareholders. However, Musk announced in a recent blog post that he and the board would, in fact, call off taking Tesla private.

Musk stated, “I worked with Silver Lake, Goldman Sachs and Morgan Stanley, who have world-class expertise in these matters, to consider the many factors that would come into play in taking Tesla private, and to process all the coming incoming interest that we received from investors to fund a go-private transaction.” He also spent time talking to several shareholders to consider whether the move would be a good idea. In the end, Musk cited the shareholders as the top reason Tesla won’t go private in the near future. This comes after earlier reports that several large-scale investors, including a Saudi-backed investment fund, were interested in backing Tesla’s move.

Tesla's first quarter 2018 sales weaker than expected
[Photo: Tesla]

“Please don’t do this”

“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 stated. “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.” Tesla’s CEO met with the Board of Directors and told them he thought it best to stay public, to which the board agreed, according to Musk’s blog post.

While Tesla stock rallied upon the initial privatization announcement, shooting up to $380 a share, the trend has cooled throughout August. As Musk made this recent announcement as trading wrapped up Friday, we’ll see where this announcement lands on the markets next week. Musk did indicate that, if anything, this move reinforced his notion that Tesla had the funding to go private, should he, the board, and investors wish to do so.

Despite the company’s move to remain public, it and Musk are facing down multiple lawsuits and an investigation. The Securities and Exchange Commission are looking into whether Musk’s initial claim that Tesla had funding to go private was truthful. Depending on the outcome of that investigation, the SEC and Department of Justice could take further action.