Electric carmaker Tesla will remain a publicly traded company, CEO Elon Musk said, barely weeks after he floated the idea of going private.
"Our investors are extremely important to me. 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.
According to reports, Tesla’s six board members revealed in a statement that plans to take Tesla private were scrapped after Elon considered all factors and came to believe that going private was not viable and communicated the same to the board.
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,” he wrote.
This comes after Musk had discussions with existing shareholders and financial advisors and learned that there is little appetite for such a move.
"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. This is a problem because we absolutely must stay focused on ramping Model 3 and becoming profitable," Musk added.
In a Twitter post dated August 7, Musk said he was planning to take Tesla private at $420 and had "funding secured".
There were reports that he hired Morgan Stanley to assist him in taking the company private.
His tweet gave way to frenzied trading as the carmaker's stock price shot up and the Nasdaq stock exchange halted the stock altogether while investors cooled off, the Vox reported. His Tweet even drew a subpoena from the Securities and Exchange Commission.