Earlier this month, Elon Musk announced on Twitter that he was considering taking Tesla private.
Since then, he has consulted with Silver Lake, Goldman Sachs and Morgan Stanley to consider the many factors that would come into play in taking Tesla private. He has also spent time listening to current shareholders, large and small, to understand what they think would be in the best long-term interests of Tesla.
Based on all the discussions here’s what it boils down to:
- Most of Tesla’s existing shareholders believe we are better off as a public company.
- 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.
In his Tesla Blog statement, Musk said:
“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.”
After considering all of these factors, he met with Tesla’s Board of Directors and let them know that the better path is for Tesla to remain public. The Board indicated that they agree.
