Tesla CEO Elon Musk recently took investors and the market by surprise when he announced his intention, by Twitter no less, to take Tesla private at $420 per share. He even claimed that funding for this massive transaction had been secured. The company’s board had formed a committee to look into the CEO’s proposal but there won’t be a need for that anymore as Musk has decided to keep Tesla public.
Musk confirmed in a post on the company’s blog that Tesla is going to remain a public company. He says that shareholder sentiment is behind this decision. “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.
He added that the process of taking the company private would be more “distracting” that had been anticipated initially and it would sidetrack Tesla from focusing on ramping up the Model 3 production. That’s crucial for the company as it looks to become profitable.
Musk did point out that while exploring this option, it has become evident that “there is more than enough funding to take Tesla private.” Whether or not that’s a subtle hint that we may see a similar move being tried a few years down the line can’t be said for sure.
Much of the funding to take the company private would have reportedly come from Saudi Arabia’s sovereign wealth fund. It already owns 5 percent of Tesla and had reached out to Musk multiple times about such a transaction.