Market Overview

Musk: Tesla Will Remain Public

Musk: Tesla Will Remain Public
Related TSLA
Musk Has No Respect For SEC, Says Tweets Aren't Being Reviewed
Mike Khouw's Tesla Options Trade
Tesla To 90,000: Delivery Forecasts For The Fourth Quarter (Seeking Alpha)

After an Aug. 7 tweet about taking Tesla Inc (NASDAQ: TSLA) private that sparked an SEC investigation, CEO Elon Musk said Friday the electric vehicle manufacturer will stay public. 

Tesla’s shareholders are largely opposed to a go-private deal, Musk said in a blog post late Friday.

“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,’” the CEO said in the post. 

Musk’s tweet — which he later admitted in a New York Times interview used a rounded-up share price of $420 as a marijuana reference — made the widely scrutinized claim that Tesla had “funding secured.” 

Tesla shares were trading at $322.82 at the close Friday.

Focus On Model 3, Profitability

In Friday’s blog post, Musk said he worked with Silver Lake, Goldman Sachs Group Inc (NYSE: GS) and Morgan Stanley (NYSE: MS) to analyze a go-private deal and concluded the process “would be even more time-consuming and distracting than initially anticipated.”

Tesla must remain focused on ramping Model 3 production and achieving profitability, he said.
“We will not achieve our mission of advancing sustainable energy unless we are also financially sustainable.”

Musk informed Tesla’s board of his conclusion that the company should remain public in a Thursday meeting, the company’s independent board members said in a Friday statement.

The special committee formed to evaluate the deal has been dissolved, and Musk continues to have the board’s backing, the six directors said.

“The board and the entire company remain focused on ensuring Tesla’s operational success, and we fully support Elon as he continues to lead the company moving forward."

Munster: 'Work For Musk To Do' To Rebuild Trust

In addition to the reasons Musk cited for dropping a privatization deal, the decision may have also come due to his media interactions and an investor perception that he’s difficult to work with, Loup Ventures managing director Gene Munster said in a Saturday post.

“We still think there is work for Musk to do to rebuilt that trust in the market.”

Loup had forecast a 75-percent chance Tesla would go private.

The tech-focused venture capital firm still thinks Tesla would have more value as a private entity, and sees the company’s shares as “undervalued” given its stake in EVs, autonomy and renewable energy, Munster said.

Munster predicts Musk will continue to lead Tesla; that class action lawsuits tied to the “funding secured” statement could dog the company for a year; and that Tesla will be fined a small amount by Nasdaq for the Aug. 7 tweet.

Related Links: 

Tesla's Stock Continues Fall After JPMorgan Cuts Target To $195

These Analysts Love Tesla's Potential, But Balk At Its Valuation

Posted-In: Elon Musk Gene Munster Loup VenturesAnalyst Color News Legal Management Top Stories Best of Benzinga


Related Articles (GS + MS)

View Comments and Join the Discussion!

Latest Ratings

MOSJP MorganDowngrades33.0
BACKeefe Bruyette & WoodsDowngrades29.0
AMTMorgan StanleyDowngrades170.0
EBAYMorgan StanleyDowngrades33.0
UNITMorgan StanleyDowngrades16.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Benzinga's Bulls & Bears Of The Week: Alibaba, Apple, Nike, Tesla, Verizon And More

Pot Stocks, ETFs, Top News And Data From The Cannabis Industry This Week