The decision is a stunning reversal after Musk shocked the financial world Aug. 7, tweeting that he wanted to take the electric-car maker private at $420 a share and had “funding secured.”
Elon Musk scrapped his plan for taking Tesla Inc. private, more than two weeks after blindsiding employees and investors with the idea via a bombshell tweet. In a blog post published late Friday, the company’s chairman, CEO and largest shareholder said he had met with Tesla’s board of directors and “let them know that I believe the better path is for Tesla to remain public. The Board indicated that they agree.”
The decision is a stunning reversal after Musk shocked the financial world Aug. 7, tweeting that he wanted to take the electric-car maker private at $420 a share and had “funding secured.” In a subsequent blog post, he indicated that no such financing deal had been closed. The tweet has drawn a subpoena from the Securities and Exchange Commission, according to a person familiar with the matter.
“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 separate statement, a committee of independent directors formed to review Musk’s proposal confirmed the decision and announced its intention to dissolve. Musk had hired both Goldman Sachs Group Inc. and Morgan Stanley, the top two merger advisers in the U.S, to advise him personally in his bid to take the company off of the public market, according to people familiar with the arrangements. Both banks have been lead underwriters on most of the company’s stock and convertible debt offerings.