Tesla Inc Chief Executive Elon Musk said late on Friday he would heed shareholder concerns and no longer pursue a $72 billion deal to take the luxury electric carmaker private, abandoning an idea that stunned investors and drew regulatory scrutiny.
The decision to leave Tesla as a publicly listed company raises new questions about its future. Tesla shares have been trading well below their August 7 levels, when Musk announced on Twitter that he was considering taking Tesla private for $420 per share, as investors wondered what this meant for Musk's ability to steer the company to profitability. Musk and Tesla also face a series of investor lawsuits and a US Securities and Exchange Commission investigation into the factual accuracy of Musk's tweet that funding for the deal was "secured."Musk said on Friday that his belief that there is more than enough funding to take the company private was reinforced during the process, but said he abandoned the bid based on feedback from shareholders and because the effort was proving to be more time-consuming and distracting.
When Musk announced to take the company private, Tesla's stock price shot up, and short sellers made money on Tesla's losses. But, the recent announcement to not go private doesn't end any of Tesla's worries by far. The company is still burning money— there have been delays in production of Model 3 car. The decision to keep the company public will brush much of the blowback under the rug for sometime.