Elon Musk reversed course Friday, saying he would keep Tesla as a publicly traded company, bowing to apparent pressure from his own shareholders while the federal government reportedly investigated his attempt to take the car company private.
In a late-night blog post, Musk, the electric car maker’s founder and chief executive, said that “most of Tesla’s existing shareholders believe we are better off as a public company.” He added the process of making Tesla a private automaker was always going to be challenging, but added it would have been “more time-consuming and distracting than initially anticipated.”
Earlier in August, Musk similarly stunned his own investors when he announced — through a nine-word tweet — “Am considering taking Tesla private at $420. Funding secured.” The statement initially sent the company’s stock price soaring. Musk’s move came as Tesla struggled to produce cars, including its new Model 3 sedan, at a fast-enough rate to satisfy demand, all the while burning through cash.
But soon after Musk’s announcement that he wanted to take Tesla private, questions emerged as to the exact nature of his proposal and whether he had secured the funding to take the company private, as he had claimed on Twitter. The Securities and Exchange Commission took interest, probing whether Musk had misled investors about the nature of his financing.
For his part, Musk told investors at one point that he had reason to believe Saudi Arabia could provide the billions of dollars necessary for such a buyout.
Even as he abandoned his plans Friday, Musk said in his blog post that the process affirmed his “belief that there is more than enough funding to take Tesla private.” He said he met with Tesla’s board of directors a day earlier “and let them know I believe the better path is for Tesla to remain public. The Board indicated that they agree.”
“Moving forward, we will continue to focus on what matters most: building products that people love and that make a difference to the shared future of life on Earth,” he said. “We’ve shown that we can make great sustainable energy products, and we now need to show that we can be sustainably profitable.”