Less than three weeks after claiming that he had secured the required funding and was taking Tesla private, Elon Musk says the electric carmaker will remain a public company.
In a late-night blog post, the outspoken CEO said he changed his mind after discussions with current shareholders about the best course of action to secure Tesla’s future.
“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,” Musk wrote.
Tesla’s reversal is as abrupt as the initial announcement
Musk went on to assert that the process of taking Tesla would have been more challenging than he initially expected, distracting the company from its immediate aims of ramping up Model 3 production and becoming profitable.
After pondering the best way to move forward, Musk said he approached Tesla’s Board of Directors and said that he believed the best decision was to keep Tesla public. The directors agreed.
Musk caused chaos on August 7, when he published a tweet that he was considering taking Tesla private at $420 a share. This led to a spike in the company’s share price before trading was halted. Shortly afterwards, the Securities and Exchange Commission announced that it was investigating the matter.
During a recent interview with The New York Times, Musk confirmed that he issued the tweet without informing the board. He has since taken lots of flak both for his erratic behavior, as well as being capable of running Tesla. It remains to be seen whether his critics will be silenced now that the status quo will be maintained.