In a statement posted on Tesla’s corporate blog late on Friday evening, Tesla CEO Elon Musk said that he had decided to keep Tesla a public company. The announcement should end weeks of turmoil following an August 7th tweet that Musk had “funding secured” to take the company private.
In the interim, Saudi Arabia’s sovreign wealth fund has been touted as the financial backing for the deal, although the exact level of the commitment meant by “funding secured” has been debated far and wide.
In the blog post, Musk says that the opinion of Tesla’s investors was the key factor in his decision to keep Tesla private:
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 also said that the process of taking Tesla would consume too much time:
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. This is a problem because we absolutely must stay focused on ramping Model 3 and becoming profitable. We will not achieve our mission of advancing sustainable energy unless we are also financially sustainable.
Musk’s time — and fitness to lead the company — have been under scrutiny since the billionaire gave a tell-all interview to the New York TImes in the wake of his going-private tweet:
To help sleep when he is not working, Mr. Musk said he sometimes takes Ambien. “It is often a choice of no sleep or Ambien,” he said.
But this has worried some board members, who have noted that sometimes the drug does not put Mr. Musk to sleep but instead contributes to late-night Twitter sessions, according to a person familiar with the board’s thinking. Some board members are also aware that Mr. Musk has on occasion used recreational drugs, according to people familiar with the matter.
In a statement, Tesla’s board said that they support Musk’s decision to keep Tesla public. “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,” the board said.