Tesla chief executive Elon Musk said last night that Tesla would remain a public company, despite previously announced plans to take it private.
In a blog post on electric car company Tesla’s website Musk wrote: “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.’”
Earlier this month Musk tweeted that he was considering taking the electric car company private, sending its share price soaring.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
The announcement shocked investors and drew an angry backlash from short sellers who accused him of trying to manipulate Tesla’s share price.
Two investors launched lawsuits against the company in the aftermath of Musk’s announcement and US regulator the Securities and Exchange Commission launched an inquiry into the statement.
Musk yesterday wrote: “Earlier this month, I announced that I was considering taking Tesla private. As part of the process, it was important to understand whether our current investors believed this would be a good strategic move and whether they would want to participate in a private Tesla.”
He said he worked with banks Goldman Sachs and Morgan Stanley and private equity firm Silver Lake on the proposals to take Tesla private.
Musk also said he spent “considerable time” talking to shareholders about what they think would be in the best long-term interests of the company.
He said feedback from investors showed most believe Tesla would be better off as a public company.
Musk said that he had decided that going private would be “more time-consuming and distracting than initially anticipated” which would be a problem as “we absolutely must stay focused on ramping Model 3 and becoming profitable”.
The Model 3 is Tesla’s mass-market electric car. The company has struggled to is production targets after problems at its factory.
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Musk added: “That said, my belief that there is more than enough funding to take Tesla private was reinforced during this process.”
“After considering all of these factors, I met with Tesla’s board of directors yesterday and let them know that I believe the better path is for Tesla to remain public. The board indicated that they agree,” he concluded.