About 3 weeks ago, Elon Musk, CEO of Tesla announced to the world that he was planning to take down the company as private at $420 per share. But, Friday night, he said that Tesla will continue as a public company. All these announcements were conveyed by him to the world via Twitter and Tesla’s blog.
Friday night, Musk posted the announcement on Tesla’s blog that he communicated with shareholders and investigated the process of taking down the company as private. But, after proper analyzing the whole process, he believes that the better path for Tesla is to continue as a public company. For conveying this decision, Musk had a meeting with Tesla’s board of directors on Thursday. The board agreed with his decision.
Here’s the meaning of his small quotation:
After receiving the feedback from Tesla’s shareholders, Musk was clear that most of its shareholders believe the company to be better as public. Also, many institutional shareholders suggested that they will face internal compliance issues that limit how much they can invest in a private company. There is no clear method for retail investors to own shares if it goes private. Musk felt that majority of shareholders who agreed to remain with Tesla if it goes private had different sentiments that suggested “Please don’t do this”.
Musk was sure that they had to face challenges for taking down the company as private. But, it would be even more time-consuming and a distracting process. Currently, they need to focus on ramping Model 3 and become profitable. They have to remain financially sustainable in order to achieve the mission of improving sustainable energy.
So, he considered every aspect of the company before taking the final decision. This includes communication with existing shareholders and analysis of the process. He also considered the company’s current situation before taking his decision. At last, he made his decision to continue Tesla as a public company.
Finally, Firday night’s announcement by Musk ends the cinematic situation that begun 17 days ago with his tweet. Tesla board or many shareholders were not really happy with this decision. For this, they provoked the U.S Securities and Exchange Commission to investigate the process.
The cinematic situation of this 17-day might be over with this decision. But, Musk’s behavior is still questionable considering the company’s future.