Tesla To Remain Public, Elon Musk Says

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Less than a month after CEO Elon Musk created a stir in the stock markets by suggesting he might take the company private, electric car maker Tesla says it will remain as a publicly traded company after all.

"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," Musk said in a statement Friday. The electric car manufacturer has been publicly traded since 2010.

He said institutional shareholders told him that because of "internal compliance issues" they were limited in how much they could invest.

"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 said.

He said going private also would be "more time-consuming and distracting than initially anticipated" at a time the company needs to focus on speeding production of the company's Model 3 car, which has missed production targets in the past.

The sedan, with a starting price of $49,000, is Tesla's attempt to create a mass-market car.

Six members of Tesla's board issued their own statement Friday, saying that a committee to evaluate taking the company private had been dissolved and that "The Board and the entire company remain focused on ensuring Tesla's operational success, and we fully support Elon as he continues to lead the company moving forward."

Tesla's stock shot up when Musk tweeted on Aug. 7 that he was considering taking the company private at $420 a share with "funding secured."

Musk said the goal of taking the company private would be to avoid the pressures of short sellers, market swings and quarterly earnings cycles, and suggested the following week that Saudi Arabia's sovereign wealth fund could help with the deal.

The Securities and Exchange Commission is now investigating Musk's tweet, according to The Wall Street Journal, as under the law "companies and corporate officers can't give shareholders misleading information about meaningful company events."</s>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 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,” Musk wrote in a statement that Tesla posted on the company’s Twitter account and 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.

In a separate statement, six of Tesla’s directors said that at the meeting, Musk “reported on the work he and his advisers have been doing in connection with this effort.”

“Elon communicated to the board that after having done this work and considered all factors, he believes the better path is to no longer pursue a transaction for taking Tesla private,” the directors said in the statement.

They also affirmed their support for Musk’s leadership. “The board and the entire company remain focused on ensuring Tesla’s operational success,” they said, “and we fully support Elon as he continues to lead the company moving forward.”

The six directors — James Murdoch, Antonio Gracias, Robyn Denholm, Brad Buss, Ira Ehrenpreis and Linda Johnson Rice — served on a special committee to evaluate the prospect of taking Tesla private. Their statement said the committee has now been dissolved.

Musk’s Aug. 7 announcement that he was considering taking the company private, made without his alerting his board, said he had “funding secured.” The unexpected turn of events led to a spike in the company’s shares and a brief halt in trading.

It turned out that the funding was less than secured. What followed was a two-week whirlwind in which Musk faced inquiries by the Securities and Exchange Commission and consternation from his own directors.

Musk went on to explain his thinking in a letter to employees, a blog post and an emotional interview with The New York Times. He expressed frustration with the demands of operating a public company, including the quarterly reports that he said incentivized shorter-term thinking.

But in the blog post Friday, he said that given the feedback he had received, “It’s apparent that most of Tesla’s existing shareholders believe we are better off as a public company.”

He added, “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.”

On Aug. 14, the company announced that its board had created a special committee to review Musk’s proposal, stressing that it could give “no assurances” that it would be accepted.

Musk wrote on Friday that “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 is Tesla’s largest single shareholder, owning just under 20 percent of the company.

In the Times interview, he told of being physically exhausted and using sleeping pills in the past year while working 100 hours or more a week at times.</s>Tesla CEO Elon Musk said late Friday that he is abandoning his plans to consider turning the Silicon Valley automaker into a private company, ending a brief and unusual dalliance that puzzled Wall Street and drew federal scrutiny.

Musk said he no longer believes Tesla would be better off as a private company, though he did not back off his assertion that sufficient private capital existed to do the deal.

The Silicon Valley automaker's board said in a statement that Musk had dissolved a special committee it formed to consider the move.

Musk stunned investors earlier this month when he tweeted that he was considering turning the company into a private entity with "funding secured."

Questions arose immediately regarding whether he had truly lined up enough money to do the deal, and the Securities and Exchange Commission is said to be scrutinizing the process.

After consulting with advisers such as Goldman Sachs and Morgan Stanley bankers, Musk acknowledged in a blog post that "most" of the company's shareholders don't want Tesla to go private.

Instead, he said, Tesla must devote its attention to accelerating production of its critical Model 3 electric sedan, which is vital to the company's finances and future.

"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," he wrote. "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."

But he also said "my belief that there is more than enough funding to take Tesla private was reinforced during this process."

Musk had previously suggested that Saudi Arabia's sovereign wealth fund had indicated a willingness to finance the deal.

Musk said he recommended to the board that the company remain public.

He has long bemoaned various aspects of Tesla's status as a public company, including the many investors who bet against the company through a process called shorting.

"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.

The six members of the automaker's special committee formed to evaluate the potential deal said, "The Board and the entire company remain focused on ensuring Tesla’s operational success, and we fully support Elon as he continues to lead the company moving forward."

More: Elon Musk claps back at plea from Arianna Huffington to slow down as he works on Tesla

Related: Elon Musk's tweet on taking Tesla private now dogged by drugs claim from rapper Azealia Banks</s>Tesla logo is pictured outside of their showroom in Washington, D.C.

Tesla CEO Elon Musk said late Friday that he is abandoning his plans to consider turning the Silicon Valley automaker into a private company, ending a brief and unusual dalliance that puzzled Wall Street and drew federal scrutiny.

Musk said he no longer believes Tesla would be better off as a private company, though he did not back off his assertion that sufficient private capital existed to do the deal.

The Silicon Valley automaker's board said in a statement that Musk had dissolved a special committee it formed to consider the move.

While Musk does not technically control the company's fate — he owns about 20 percent of it — he exerts tremendous control over its future.

Musk stunned investors earlier this month when he tweeted that he was considering turning the company into a private entity with "funding secured."

Questions immediately arose regarding whether he had truly lined up enough support to do the deal — and now the Securities and Exchange Commission is said to be scrutinizing the process.

The primary advantage of going private was to escape scrutiny over quarterly earnings and vehicle sales in favor of focusing on long-term growth plans.

But analysts noted that Tesla investors have not typically punished the company for losing money and falling short of production goals. Instead, the company has repeatedly been rewarded with additional capital that has funded its rise.

After consulting with advisers such as Goldman Sachs and Morgan Stanley, Musk acknowledged in a blog post that "most" of the company's shareholders don't want Tesla to go private.

Instead, he said, Tesla must devote its attention to accelerating production of its critical Model 3 electric sedan, which is vital to the company's finances and future.

"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," he wrote. "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."

More: Elon Musk creates stir: Tesla could and should go private, CEO says

More: Elon Musk claps back at plea from Arianna Huffington to slow down as he works on Tesla

Related: Elon Musk's tweet on taking Tesla private now dogged by drugs claim from rapper Azealia Banks

Musk had previously suggested that Saudi Arabia's sovereign wealth fund had indicated a willingness to finance the deal.

He said Friday that "my belief that there is more than enough funding to take Tesla private was reinforced during this process."

Musk also serves as CEO of SpaceX and leads a tunnel-boring company that aims to revolutionize transportation. He has attracted many fans and many critics — as well as many who admire his ambition but question whether he can execute his plans for Tesla.

For his part, Musk has dismissed critics, sometimes brusquely on Twitter. Among his opponents are investors who have bet against the company through a process called shorting.

He made no mention of them in his blog post Friday.

"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.

The six members of the automaker's special committee formed to evaluate the potential deal said, "The Board and the entire company remain focused on ensuring Tesla’s operational success, and we fully support Elon as he continues to lead the company moving forward."</s>DETROIT – Tesla Inc. CEO Elon Musk says investors have convinced him that he shouldn’t take the company private, so the firm will remain on the public stock markets.

The eccentric and sometimes erratic CEO said in a statement late Friday that he made the decision based on feedback from shareholders, including institutional investors, who said they have internal rules limiting how much they can sink into a private company.

Musk met with the electric car and solar panel company’s board on Thursday to tell them he wanted to stay public and the board agreed, according to the statement.

In an Aug. 7 post on Twitter, Musk wrote that he was considering taking the company private. He said it would avoid the short-term pressures of reporting quarterly results.

More: Elon Musk claps back at plea from Arianna Huffington to slow down as he works on Tesla

Related: Elon Musk's tweet on taking Tesla private now dogged by drugs claim from rapper Azealia Banks</s>Tesla will remain a public company, CEO Elon Musk said Friday night, less than three weeks after he announced to the world via Twitter that he was considering taking the electric automaker private at $420 a share.

Musk, who posted the announcement via Tesla’s blog, said Friday that after speaking with shareholders and investigating the process of taking the company private he believes the better path is for Tesla to remain public. Musk met with Tesla’s board of directors Thursday and told him his decision. The board agreed, he wrote.

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.

Friday night’s announcement closes a tumultuous 17 days that began with Musk tweeting that he secured funding and was considering taking Tesla private. The tweet wasn’t warmly embraced by the Tesla board or many shareholders. It also prompted the U.S. Securities and Exchange Commission to investigate.

While this 17-day ride might be over, the questions over Musk’s behavior (and possible drug use) and the company’s future are likely not.</s>There’s a big problem with Elon Musk’s plan to take Tesla private In a blog post published Friday evening, Tesla CEO Elon Musk said that he would change course from his sudden announcement three weeks ago, and would actually keep Tesla as a publicly-traded company.

"It’s apparent that most of Tesla’s existing shareholders believe we are better off as a public company," he wrote. "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."

Musk noted that he had met with the Tesla board of directors on Thursday and "let them know that I believe the better path is for Tesla to remain public. The Board indicated that they agree."

“A huge outlier”: Musk’s Tesla buyout tweet could get him in legal trouble The strange saga began with an August 7 tweet that many weren't sure if it should be taken seriously. Nearly immediately, the stock price of the company shot up, and was even briefly suspended.

Within a week Musk revealed that the mystery funder was the Saudi Arabian sovereign wealth fund.

However, due to the strange way that this announcement unfolded, the company has reportedly drawn scrutiny from both the Securities and Exchange Commission and upset investors who have filed five federal lawsuits.

As recently as August 14, Tesla announced that its Board of Directors had formed a "special committee" of three directors to examine whether taking the company private was feasible.

"The special committee has not yet received a formal proposal from Mr. Musk regarding any Going Private Transaction nor has it reached any conclusion as to the advisability or feasibility of such a transaction," the company said.

"No assurances can be given regarding the likelihood, terms and details of any proposal or potential Going Private Transaction, that any proposal made by Mr. Musk regarding a potential Going Private Transaction will be accepted by the special committee, that definitive documentation relating to any such Going Private Transaction will be executed or that such a transaction will be completed."

That committee was formally dissolved on Thursday, August 23, according to a statement from the Board itself.

"Over the past several weeks, we put in place a process led by a Special Committee of the Board to evaluate a proposal Elon was considering to take Tesla private," the Board wrote.

"Yesterday, we held a Board meeting, during which Elon reported on the work he and his advisors have been doing in connection with this effort. Elon communicated to the Board that after having done this work and considered all factors, he believes the better path is to no longer pursue a transaction for taking Tesla private. After discussing this, we dissolved the Special Committee. The Board and the entire company remain focused on ensuring Tesla’s operational success, and we fully support Elon as he continues to lead the company moving forward."

Tesla spokesman Dave Arnold referred Ars to Musk's blog post and the Board's announcement, declining to respond to questions.

"We don’t have anything further," he emailed.</s>Tesla Inc. Chief Executive Elon Musk said late Friday that he is giving up on taking the company private in the wake of shareholders’ objections, 17 days after he shocked the business world with a tweet announcing intentions to pursue the idea.

In a post on the company’s website, Mr. Musk said he had informed Tesla’s board Thursday that “I believe the better path is for Tesla to remain public.” Tesla directors around the same time Friday night released a statement saying “we fully support Elon as he continues to lead the...</s>Tesla Inc. CEO Elon Musk said Friday that investors have convinced him that he shouldn't take the company private, so the firm will remain on the public stock markets.The eccentric and sometimes erratic CEO said in a statement that he made the decision based on feedback from shareholders, including institutional investors, who said they have internal rules limiting how much they can sink into a private company.Musk met with the electric car and solar panel company's board on Thursday to tell them he the company to stay public and the board agreed, according to the statement.In an Aug. 7 post on Twitter, Musk wrote that he was considering taking the company private. He said it would avoid the short-term pressures of reporting quarterly results. The tweet said funding had been secured for the deal, but the company later said the details still had to be worked out with Saudi Arabia's Public Investment Fund.The tweet said Tesla would offer $420 per share, 23 percent above the Aug. 6 closing price. If all the shares were bought, the deal would be worth $72 billion, but Musk later said he expected only one-third of stakeholders to agree to the buyout.The bizarre tweet, written while Musk was driving to the airport, brought an inquiry from the U.S. Securities and Exchange Commission, which reportedly is looking into whether he was trying to manipulate the share price. It since has fallen.In the statement, Musk said he worked with investment firms Goldman Sachs, Morgan Stanley and Silver Lake to consider all the options, and he talked to investors."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," Musk wrote in the statement.</s>Tesla CEO Elon Musk said Friday that the company would continue to be publicly traded, weeks after suggesting that he would take the pioneering electric carmaker private.



Musk met Tesla´s board of directors on Thursday "and let them know that I believe the better path is for Tesla to remain public. The Board indicated that they agree," he wrote on the company blog.

Musk surprised markets on August 7 by announcing on Twitter he wanted to take Tesla private at $420 a share. But the shares have fallen more than 20 per cent since.

After the announcement the controversial entrepreneur came under extensive scrutiny over his Twitter statements related to the proposal, especially a claim that Tesla had 'secured' funding for the move.

Tesla shares tumbled on reports that the US Securities and Exchange Commission has subpoenaed Musk to talk about the tweet.

Normally such a major announcement — taking a huge company private — would be explained in detail beforehand to regulators.

Musk said Friday that based on his talks with shareholders, as well as an assessment by financial advisers Silver Lake, Goldman Sachs and Morgan Stanley, "it´s apparent that most of Tesla´s existing shareholders believe we are better off as a public company."

Even though the majority of shareholders "said they would remain with Tesla if we went private, the sentiment, in a nutshell, was ´please don´t do this,´" he wrote.

"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."

Musk wrote that the company "must stay focused on ramping (up the) Model 3 and becoming profitable. We will not achieve our mission of advancing sustainable energy unless we are also financially sustainable."

The Model 3 is a $35,000 mid-sized electric sedan that the company — which still has not made a profit — is banking will be its runaway hit.

Musk acknowledged that he was exhausted from overwork following the market-rattling August 7 tweet.

"This past year has been the most difficult and painful year of my career," Musk told the New York Times in an August 16 interview.

The newspaper said the swashbuckling CEO choked up at times as he talked about working endless hours trying to meet production deadlines, spending his 47th birthday in June — every hour of it — at work and almost missing his brother´s wedding.

The physical toll his job is taking meant life has "not been great, actually. I´ve had friends come by who are really concerned," he told the newspaper.

Musk described the infamous privatisation tweet — which included an assurance that funding for going private was secured — as an attempt to be transparent.

The news shocked investors, market analysts and even Tesla board members.

Musk explained on the company blog that his much scrutinized statements about financing were based on his conversations with Saudi Arabia´s sovereign wealth fund and other investors.
Two weeks after Elon Musk expressed his intentions of making Tesla, Inc. private, he and the company's board announce that the company will remain publicly listed.