Published: Tue, August 28, 2018
Money | By Ethel Goodwin

Elon Musk retracts privatisation, Tesla to remain public

Elon Musk retracts privatisation, Tesla to remain public

The process of going private was expected to be challenging, but now it's clear that it could have been even more time-consuming and distracting than initially anticipated, Tesla's chief executive noted, adding that the company "absolutely" must stay focused on ramping Model 3 production and becoming profitable. Several investors have also sued Tesla, alleging that Musk's announcement was meant to manipulate the price of the company's stock. In an August 13 statement, Musk said that he left a July 31 meeting with the managing director of Saudi Arabia's sovereign wealth fund "with no question that a deal ... could be closed".

Musk blinked partly because pulling off a buyout might require getting into bed with competitors, according to the Wall Street Journal, which reported that German vehicle giant Volkswagen was prepared to team up with Silver Lake to invest as much as $30 billion into the endeavor.

The case is Wochos v Tesla Inc et al, U.S. District Court, Northern District of California, No. 17-05828. Well, if you recall, the company's CEO Elon Musk has been stirring the Tesla pot lately. Banks had at most just a couple of weeks to assess the situation, after being brought in to advise only after Musk's initial tweet, said the people, who asked not to be identified as the details aren't public.

Shares of Tesla slipped on the first day of trading after the electric vehicle maker said it won't consider going private after all.

Yet no decisions had been made on how to advance as the advisers were still trying to understand the funding situation and whether taking the company private was even plausible, the people said. Musk's plans for Tesla are reportedly being scrutinized by the SEC, especially in the "funding secured" part of his shock announcement on Twitter.

The next measure of how Tesla bounces back may come in early October, when it will report third-quarter production and deliveries.

Lawsuits against Mr Musk, co-founder and chief executive of Tesla, "could linger for a year", Gene Munster, managing partner at Loup Ventures, a venture capital firm, said. Musk's exhaustion, which the CEO described in a New York Times interview, is the "most critical near-term concern".

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