Last night, Elon Musk, the chief executive of Tesla, said that the company would remain a public company. His statement comes after he previously announced his plans to take the firm private.
In a blog post on the website of Tesla, the electric car company, Musk posted: “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 posted a tweet where he said that he was considering taking the electric car company private earlier this month. The said tweet sent the share price of Tesla soaring.
The said announcement surprised investors and drew an enraged backlash from short sellers who accused him of attempting to manipulate the share price of Tesla.
Two investors have already launched lawsuits against the firm in the aftermath of the announcement of Musk and the Securities and Exchange Commission, a US regulator, started a probe into the statement.
Yesterday, Musk wrote: “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.”
Musk said that he worked with banks Morgan Stanley and Goldman Sachs and Silver Lake, a private equity company, on the proposals to take Tesla private.
Musk also said that he spent “considerable time” discussing with shareholders regarding what they think would be in the best long-term interests of the firm.
He said that the feedback from investors revealed that most believe that Tesla would be better off as a public firm.
He said that he had concluded that going private would be “more time-consuming and distracting than initially anticipated.” He said that it would be a problem as “we absolutely must stay focused on ramping Model 3 and becoming profitable.”
The Model 3 is the mass-market electric car of Tesla. The firm has been struggling to achieve its production targets after problems at its factory.
Musk continued: “That said, my belief that there is more than enough funding to take Tesla private was reinforced during this process.”
he concluded: “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.”