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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Musk Scraps Plan To Take Tesla Private

Tesla will stay public, Elon Musk said late on Friday, ending more than two weeks of speculation and calculation about how much a go-private deal would cost and who could be involved in it.

At the beginning of this month, Elon Musk shocked Wall Street and investors by tweeting that he would take Tesla private at $420 a share, sparking speculation whether the funding for doing so is really ‘secured’ as he said in his tweet, and who would step in to raise the funding.

A week later, Musk revealed that he had been in talks with the Saudi Arabian sovereign wealth fund about taking Tesla private for a few years now. Musk’s plans for Tesla are reportedly being scrutinized by the SEC, especially in the ‘funding secured’ part of his shock announcement on Twitter.

On August 24, Musk wrote that he felt was important to understand if “current investors believed this would be a good strategic move and whether they would want to participate in a private Tesla.”

After receiving feedback from investors, Musk said that “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.”

“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. 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,’” Musk wrote. Related: Europe’s Natural Gas Prices Surge To Record For Summer Season

The process of going private was expected to be challenging, but now it’s clear that it could have been even more time-consuming and distracting than initially anticipated, Tesla’s chief executive noted, adding that the company “absolutely” must stay focused on ramping Model 3 production and becoming profitable.

“We will not achieve our mission of advancing sustainable energy unless we are also financially sustainable,” Must said.

Tesla’s stock dropped from $379.57 at close on August 7—the day of the ‘going-private’ tweet—to $322.82 at close on August 24, just before Musk said later in the day that Tesla stays public.

By Tsvetana Paraskova for Oilprice.com

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