Musk Scraps Plan To Take Tesla Private

Elon Musk

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Investors in electric vehicle firm Tesla are braced for rocky trading today after boss Elon Musk abandoned a shock plan to take the firm private.

Tesla's stock price fell 3 percent on Monday, even as leading USA indexes pushed deeper into record terrain, with investors assessing Musk's about-face as well a regulatory probe into his go-private proposal.

Explaining his reversal in a late-night blog post on Friday, the billionaire CEO said that taking the company private "would be even more time-consuming and distracting than initially anticipated", and that "most of Tesla's existing shareholders believe we are better off as a public company".

According to the report, the new institutional investors would want greater control of the company.

At the time, Musk said funding had been secured, though he later revealed in a blog post that there was no concrete deal in place and, in fact, he was still open to talking with other investors. Could the SEC investigation have played a role?

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The Wall Street Journal reports that sentiment ran deeper, noting that at least one board member cheered when Musk announced that he would withdraw the proposal to go private. In addition to its interest in Tesla, the Saudi sovereign wealth fund is considering an investment in aspiring USA electric-car maker, Lucid Motors Inc., one of the people said.

In early August, Musk tweeted that he had secured financing to buy the company out from the stock market, making them more independent. Was it the advice of equity firm Silver Lake, or investment juggernaut Goldman Sachs? It quickly became clear that many of Tesla's investors would not have been able to follow, as internal investment regulation would have tied quite a few hands.

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

Tesla also said on Sunday it was not searching for a chief operating officer - a No. 2 executive that critics claim Musk badly needs, as his micromanaging ways have lately led to him to sleep on the floor of Tesla's factory in Fremont, Calif. Musk's exhaustion, which the CEO described in a New York Times interview, is the "most critical near-term concern".

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