latest automotive news, best new and used cars, find a new car 1acf5_Elon-Musk-Tesla-Model-S-Circa-2011-610x406 Musk Pulls a Smoking 180, Leaves Go-private Plan in Rear-view Tesla

Fear not, there’ll be plenty of moaning about short sellers in the weeks and months — and probably years — to come. Late Friday, Tesla CEO Elon Musk pulled an about-face, issuing a blog post in which he claimed a couple of weeks of study revealed he shouldn’t take his publicly traded automaker private.

Apparently, the trip from “funding secured” to “the funding totally would have been there”* (not a direct quote) takes 17 days.

In the post, titled “Staying Public,” Musk outlines the process that followed his fateful August 7th tweet, in which he outlined why he believed the company should go private at $420 a share. A later New York Times interview revealed a sleep-deprived Musk issued the unapproved tweet from his car while driving to work. Sources claim the tweet “blindsided” board members.

After commenting on the loyalty of the company’s investors, Musk describes working with financial advisors from Silver Lake, Goldman Sachs and Morgan Stanley to gauge interest from investors in funding his plan. There’s no mention of the Saudi sovereign wealth fund, which Musk pointed to as a possible source of funds in a blog post released immediately after his Aug. 7 tweet.

Per Musk:

Based on all the discussions that have taken place over the last couple of weeks and a thorough consideration of what is best for the company, a few things are clear to me:

  • 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.â€�

  • 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.

  • That said, my belief that there is more than enough funding to take Tesla private was reinforced during this process.

By issuing his intention to go private via tweet while remaining very vague about the source of the needed funding, Musk earned the wrath of shareholders and the scrutiny of the U.S. Securities and Exchange Commission. The SEC launched an investigation and reportedly issued a subpoena; several shareholders sued. As days passed without any new info on where these billions would come from, Tesla’s stock plunged.

On Friday, shortly before Musk’s blog post, CNBC ran a story stating the hiring of Morgan Stanley pretty much proved that the “funding secured” line was, at best, wishful thinking. Morgan Stanley is well-known for its “expertise for casting a wide net for financing,” CNBC noted.

It isn’t known how the SEC reacted to this latest development. In his post, Musk claims the automaker’s board backs him in this U-turn. The company’s environmental mission continues, Musk said, before closing the message with a word of thanks to investors, customers, and employees.

[Image: Tesla]

Article source: https://www.thetruthaboutcars.com/2018/08/musk-pulls-a-smoking-180-leaves-go-private-plan-in-rear-view/

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