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. 
 
 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. They believe strongly in our mission to advance sustainable energy and care deeply about our success. 
 
 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 incoming interest that we received from investors to fund a go-private transaction. I also spent considerable time listening to current shareholders, large and small, to understand what they think would be in the best long-term interests of Tesla. 
 
 Based on all the discussions that have taken place over the last couple of weeks and a thorough consideration of what is best for the company, a few things are clear to me: 
 
 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.” 
 
 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. We will not achieve our mission of advancing sustainable energy unless we are also financially sustainable. 
 
 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. 
 
 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. We’ve shown that we can make great sustainable energy products, and we now need to show that we can be sustainably profitable. With all the progress we’ve made on Model 3, we’re positioned to do this, and that’s what the team and I are going to be putting all of our efforts toward. 
 
 Thank you to all of our investors, customers and employees for the support you’ve given our company. I’m incredibly excited to continue leading Tesla as a public company. It is a privilege. ||||| Tesla isn’t going private after all. 
 
 In a statement late Friday night, Elon Musk, the electric-car maker’s chief executive, said he and the company’s board had concluded that they would not turn Tesla into a privately owned company. 
 
 The move halts a process set in motion by Mr. Musk in a Twitter post on Aug. 7. The reversal is the latest upheaval for the company, which has struggled with production challenges for its first mass-market car, the Model 3. 
 
 “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,” Mr. Musk wrote in a statement that Tesla posted on the company’s blog shortly after 11 p.m. 
 
 “After considering all 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,” he said. ||||| If Elon Musk’s plan in announcing he was thinking of taking Tesla private was to get revenge against short sellers, it’s not exactly working out. 
 
 Investors betting against the electric car company have actually made money since Musk’s now-infamous tweet — $1.2 billion, in fact. Most of that amount came the day after his emotional interview with the New York Times published, which drove Tesla’s stock down about 9 percent. 
 
 Short sellers are investors who essentially bet against a company and make money when a stock’s price falls. Tesla is among the most shorted stocks in the history of the stock market — there were more than $13 billion worth of shares sold short at its August peak, according to Bloomberg — and it’s something that has incensed Musk for years. He claims that the high number of Tesla shorts gives people “incentive to attack the company” even when they’re wrong. 
 
 Musk’s animus toward short sellers appears to be part of what prompted his surprise August 7 announcement via tweet that he was considering taking Tesla private. (In a pair of subsequent blog posts explaining the tweet, Musk laid out more of his rationale on privatizing, including his desire to avoid the harm he sees caused by shorts, and said he decided to make the Twitter announcement because the way to have “meaningful discussions with our largest shareholders was to be completely forthcoming with them about my desire to take the company private.”) Valued at $70 billion, it would be the largest corporate buyout ever. 
 
 Shareholders could either to sell at 420 or hold shares & go private — Elon Musk (@elonmusk) August 7, 2018 
 
 The day of the announcement, Tesla’s share price jumped by about 11 percent, ticking up from less than $350 a share at the start of the day to about $387 by the end of it. (Musk had said he wanted to take Tesla private at $420 a share.) But since then, Tesla’s share price has drifted back down. On Friday, it fell by nearly 9 percent to $305.50. 
 
 If Musk was motivated to make the privatization announcement to squeeze out short-sellers, it’s backfired. 
 
 Financial and technology analytics firm S3 Analytics in a report on Friday estimated Tesla shorts are up $1.2 billion since Musk’s August 7 tweet, and $1 billion of that came on Friday alone, the day after Musk’s Times interview. 
 
 In the interview, the South African-born entrepreneur described the “excruciating” past year of his life, including 120-hour workweeks and three to four days spent inside Tesla’s factories. “The worst is over from a Tesla operational standpoint,” he said. “But from a personal pain standpoint, the worst is yet to come.” 
 
 The Securities and Exchange Commission has reportedly issued subpoenas investigating whether Tesla did indeed have the “funding secured” for its privatization, as Musk’s tweet asserted, and is also looking into whether the move was intended to harm short sellers. Even before the tweet, the SEC was reportedly probing whether Tesla misled investors about its Model 3 production issues. 
 
 The Times also reported that Tesla’s board of directors is worried about Musk’s Ambien habit and that the company is trying to recruit a second-in-command to help Musk, who the publication said “alternated between laughter and tears” during the sit-down. 
 
 This could be a temporary blip, but it might not be. 
 
 A few days after his August 7 tweet, David Einhorn, the billionaire manager of fund Greenlight Capital, tweeted out a pair of shorts he believed Musk had sent him taunting him over his short position in Tesla. Apparel maker Chubbies was later revealed to be the actual sender, and Musk tweeted his approval of the move. 
 
 I want to thank @elonmusk for the shorts. He is a man of his word! They did come with some manufacturing defects. #tesla pic.twitter.com/qsYfO8cbkp — David Einhorn (@davidein) August 10, 2018 
 
 Awesome — Elon Musk (@elonmusk) August 10, 2018 
 
 While Tesla shorts may have made money on Friday, they haven’t always been on the winning side of the stock. Musk’s privatization announcement cost short sellers $1.3 billion, according to S3. Although they’ve since more than recouped that initial loss after a $2.5 billion swing back in their favor, the firm estimates that long-term shorts have lost $5 billion on their bet since 2016. 
 
 But they’re not backing down. 
 
 Robert Chapman, a manager at Chapman Capital, told Bloomberg he doubled his short position after Musk’s August 7 tweet. “The more one learns about this situation, the more this appears to be a fakeover vs. takeover,” he said. 
 
 Chris Brown, managing member at Aristides Capital, another Tesla shorter, was also emboldened. “It always ends poorly for companies when they’re trying to squeeze the shorts,” he told the publication. “The idea of a transaction itself is idiotic.” 
 
 Both interviews were before Tesla’s Friday stock drop. 
 
 Beyond the shorts, the reported SEC probes, and questions about going private, Tesla is also facing another and potentially more pressing issue: low cash reserves. 
 
 Bloomberg reported in April that there is a “genuine risk” that the electric car company could run out of cash in 2018. (The story literally has a ticker counting Tesla’s cash burn as you read.) Analysts at Goldman Sachs, Jefferies, and Moody’s have all argued that Tesla is in deep financial trouble, despite Musk’s assertions that everything is fine. Tesla would need money to go private. But it also might need money just to stay afloat. 
 
 As of June 30, Tesla has $2.2 billion in cash, which it says is “expected to grow” in the third quarter. 
 
 That’s part of what the shorts are focusing on — and what’s got them in Musk’s head. 
 
 He told the Times he was bracing for “at least a few months of extreme torture” from the shorts, “who are desperately pushing a narrative that will possibly result in Tesla’s destruction.” 
 
 “They’re not dumb guys, but they’re not supersmart,” he said. “They’re okay. They’re smartish.” ||||| LISTEN TO ARTICLE 3:48 SHARE THIS ARTICLE Share Tweet Post Email 
 
 Tesla Inc. is under investigation by the Justice Department over public statements made by the company and Chief Executive Officer Elon Musk, according to two people familiar with the matter. The criminal probe is running alongside a previously reported civil inquiry by securities regulators. 
 
 Federal prosecutors opened a fraud investigation after Musk tweeted last month that he was contemplating taking Tesla private and had “funding secured” for the deal, said the people, who were granted anonymity to discuss a confidential criminal probe. The tweet initially sent the company’s shares higher. 
 
 Tesla confirmed it has been contacted by the Justice Department. 
 
 “Last month, following Elon’s announcement that he was considering taking the company private, Tesla received a voluntary request for documents from the DOJ and has been cooperative in responding to it,” the company said in a statement released Tuesday following Bloomberg’s report of the investigation. “We have not received a subpoena, a request for testimony, or any other formal process. We respect the DOJ’s desire to get information about this and believe that the matter should be quickly resolved as they review the information they have received.” 
 
 The investigation by the U.S. attorney’s office in the Northern District of California follows a subpoena issued by the Securities and Exchange Commission seeking information from the electric-car maker about Musk’s plans to go private, which he has since abandoned. 
 
 The criminal inquiry is in its early stages, one of the people familiar with the matter said. Justice Department probes, like the civil inquiries undertaken by the SEC, can take months. They sometimes end with prosecutors deciding against bringing any charges. 
 
 Tesla shares dropped 3.4 percent to $284.96 on Tuesday and are down about 8.5 percent this year. 
 
 Abraham Simmons, a spokesman for the U.S. attorney’s office in San Francisco, declined to comment. 
 
 SEC Probe 
 
 SEC enforcement attorneys in the San Francisco office were already investigating Tesla before Musk sent his tweet on taking the company private, Bloomberg reported Aug. 9. The existing probe focuses on whether Tesla had issued misleading pronouncements on manufacturing goals and sales targets, according to the two people familiar with the matter. 
 
 It’s unclear whether the criminal investigation is that broad. Prosecutors in securities-fraud investigations could seek evidence on matters including whether company leaders intentionally lied to investors about the health of the business. 
 
 Morgan Stanley Sees $2.5 Billion Equity Raise for Tesla 
 
 Musk exposed himself to legal risk by tweeting Aug. 7 that he had the funding for a buyout even though that may not have been the case. Almost a week later, Musk said the basis for his statement was conversations with Saudi Arabia’s Public Investment Fund, which first expressed interest in helping take the company private in early 2017. 
 
 Abandoned Effort 
 
 Tesla’s board then said that it hadn’t received a formal proposal from Musk, who’s also the company’s chairman, nor had it concluded whether going private would be advisable or feasible. Less than three weeks after his initial tweets, Musk abandoned the effort. 
 
 Now that Musk’s tweeting has attracted the Justice Department’s attention, investigators there could extend their review to other public statements made by the CEO about the company’s health, according to one of the people familiar with the matter. Authorities could also look into the circumstances surrounding the resignation of Tesla’s Chief Accounting Officer, Dave Morton, after less than a month on the job, the person said. 
 
 For more on Tesla, check out the Decrypted podcast: 
 
 Morton, a former chief financial officer for computer hard-drive maker Seagate Technology Plc, joined Tesla one day before Musk tweeted that he was considering buying out some investors at $420 a share and taking the company private. 
 
 The EV maker could raise $2.5 billion in equity in the fourth quarter from investors that have strategic interest in its business model, Morgan Stanley analysts wrote in a note dated Sept. 18, outlining several possibilities. 
 
 — With assistance by Joel Rosenblatt, Eric Newcomer, and Kartikay Mehrotra
– What started on Twitter has ended on the Tesla company blog. Elon Musk announced in a statement posted there late Friday night that the electric car maker would not in fact be going private. He writes, "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." And "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.'" The statement elaborates on his meetings with investment firms Silver Lake, Goldman Sachs, and Morgan Stanley, and Musk says his initial assertion that the funding was there was "reinforced." But "after considering all these factors"—including institutional investors, who said internal rules limit how much they can put into a private company—"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 New York Times reports a very brief second statement issued by six of Tesla's directors says the special committee established to look into the feasibility of going private has now been dissolved; the statement also voices the board's "[full] support" for Musk. As for what Musk had to say on Twitter, he simply retweeted the company's tweet of his statement, adding the words, "Staying Public."