Tesla CEO Musk abandons $72 billion take-private deal

The maverick Tesla founder has listened to shareholder advice and dropped plans to take the company private. Musk issued a blog post on the company’s website, stating that after thorough consideration, Tesla would remain on the stock market. He confirmed that investor feedback to his private company option was ‘please don’t do this’. Musk went on to acknowledge that the private-ownership process was more challenging than he had anticipated. This would also create an unwelcome distraction to the crucial Model 3 production program.

Smoking guns

Stock market analysts have breathed a collective sigh of relief that another turbulent period in the history of Tesla is over. Yet, the smoking guns of shareholder lawsuits and federal investigations remain. Musk’s original ‘funding secured’ tweet is under investigation from the Securities and Exchanges Commission. Furthermore, as reported in the Wall Street Journal, subpoenas requesting information have been issued to each Tesla director. The specifics are unknown but the statement from the CEO is a timely one, if not somewhat overdue.

The fallout from the unnecessary episode has seen the Tesla share price fall below its pre-tweet level, further empowering the short-sellers that so enrage Musk. Yet, his own actions have destabilised investor confidence in a company that sells itself on a vision of sustainable energy. Tesla must show stability to the stock markets and the ‘Staying Public’ statement is a step in the right direction.

Starman falls to Earth

However, another PR disaster like this and it will be two steps backwards, something that cash-burning Tesla cannot accommodate. According to Reuters, investment giant Citigroup Inc advised earlier this month that, if staying public, Tesla would be wise to raise ‘significant equity capital’ sooner rather than later. 

The mercurial but fatigued Elon Musk provides an entertaining spectacle. Yet, Tesla and its shareholders have to hope it is not a case of eat, medicated sleep, tweet, repeat.


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Everything Apple, every day. This post was written by an AppleMagazine newsroom writer.