After brewing up all the excitement of people regarding Tesla going private, the company announced that it will remain a public company.
CEO Elon Musk on Friday stated that after interacting with shareholders and investigating the procedure and process of taking the company private, he believes the better way for Tesla is to remain public. For the same purpose, Musk had a meeting with Tesla’s board of directors on Thursday and announced his decision.
“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 board members wrote.
On the other hand, the special committee that was formed for the purpose of taking Tesla private has been dissolved. When Musk tweeted to take the company private, most of the shareholders and investors showed a disinterest in this regard. Elon’s tweet wasn’t warmly embraced by the Tesla board or many shareholders.
Staying Public https://t.co/gUrAnInBOu
— Tesla (@Tesla) August 25, 2018
Musk posted the announcement through Tesla’s blog that stated,
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.
Musk had even raised funds worth $72 billion for the purpose. Pressure grew on Musk after he disclosed that he had not closed a deal to secure funding from Saudi Arabia’s sovereign wealth fund.
Finally, the doubt that everyone had has been cleared and Tesla is not going private. Musk also stated the further, the company will focus on building products that people love and that make a difference in every aspect.