Musk abandons plan to take Tesla private

Tesla chief executive officer Elon Musk has pulled back on his plan to go private with the electric car company.

The idea tweeted earlier this month by Musk to go private for US$420 a share stunned some investors and prompted a US Securities and Exchange Commission investigation after Tesla share prices jumped in response to his announcement.

Musk says he’ll heed shareholder concerns and no longer pursue a $US72 billion deal to take Tesla private.

He and Tesla still face a series of investor lawsuits and the commission investigation into the factual accuracy that deal funding was “secured”.

Musk says on the Tesla website on August 24 that his belief more than enough funding would have been available has been reinforced during the recent process which included working with Silver Lake, Goldman Sachs and Morgan Stanley, and listening to shareholders.

“I knew the process of going private would be challenging, but it’s clear that it would be even more time consuming and distracting than initially anticipated,” Musk says. “This is a problem because we absolutely must stay focused on ramping Model 3 and becoming profitable.”

Musk says, “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’.”