Tesla chief Elon Musk cancelled his plan to take the firm private, just days after he tweeted about going public, which had taken employees and investors by surprise.
In a blog post on Friday, Musk revealed that he had met with the board to let them know that he believes the better path is for Tesla to remain public. “The Board indicated that they agree,” he wrote.
The turnaround of events concludes speculation about how the Tesla CEO would raise money to take the company private.
However, it’s unlikely to ward off scrutiny of the maverick CEO’s actions, according to a Bloomberg report.
Musk’s recent tweet that he wanted to take the electric-car maker private at $420 a share and had “funding secured” sent the shares soaring before it became apparent he didn’t have financing lined up, said the report.
The episode led to a subpoena from the US Securities and Exchange Commission, according to a person familiar with the matter, reported Bloomberg.
It said, “Musk’s behaviour, including a tearful interview with the New York Times that touched on his lack of sleep, has led to calls for Tesla to hire a chief operating officer to help reduce stress on the CEO. Musk, who also runs the rocket-launching company SpaceX and a tunnel-drilling outfit called the Boring Co., is busy trying to ramp up Tesla’s production of the Model 3 sedan and make the company profitable in the second half of the year.”
In another blog post earlier this month, Musk indicated that he believed based on conversations with Saudi Arabia’s Public Investment Fund that he had financial support to go private. In his blog post Friday, Musk reiterated his “belief that there is more than enough funding to take Tesla private” but said a transaction would be distracting and take too long, reported Bloomberg.
“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,” wrote Musk. “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.’”
In a later tweet, he added, “In talking to our public investors, most were supportive of optimising for long-term value creation over quarterly earnings. This was also a factor in remaining public.”
In a separate statement, the board confirmed the decision and announced its intention to dissolve a committee of independent directors formed to review Musk’s proposal, said Bloomberg.
“We fully support Elon as he continues to lead the company moving forward,” the independent board members said.