Electric car innovator Tesla will remain a public company, CEO Elon Musk announced late Friday in a blog post titled "Staying Public" published on Tesla's website.
Why is it notable that things are staying the way they were? Well, if you recall, the company's CEO Elon Musk has been stirring the Tesla pot lately. In a single tweet, Musk had people all over the world saying in dismay: Tesla is going private? How? And why now?
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
Musk has been raging a war against short-sellers — investors that make money when Tesla's stock value dips. A way to shut them up? Take the company's stock from open speculation and into private hands. And if Musk's tweets were to be believed, it was basically a done deal.
Well, turns out that deal was not exactly done, the funding far from secured. The Saudi Arabian sovereign wealth funds Musk said he was talking to had "shown no interest" in buying out Tesla according to Reuters.
The following Securities and Exchange Commission (SEC) investigation didn't help Elon's cause, further jeopardizing the financial future of the company. If the SEC were to find that Musk made decisions without investors' knowledge, the company could bar Musk from acting as CEO, or even pursue formal charges of fraud according to the New York Times.
Now, Musk has walked back on that whole privatizing thing. After consulting with Tesla's Board of Directors and "current shareholders, large and small," the post says, Musk decided it would be best to give privatization a rest. Turns out no one was all that into the idea to begin with. As Musk admits: "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.'"
Surely, though, it wasn't just because people didn't like it that Musk reversed course. Could the SEC investigation have played a role? Was it the advice of equity firm Silver Lake, or investment juggernaut Goldman Sachs? Was it because the Tesla factory was literally on fire the day before Musk's announcement?
Perhaps it was simply because Elon Musk didn't think it all the way through or consider all the possible outcomes when he "considered" a private buyout. People close to Musk have said that he might have been "overly simplistic" in his thinking, the New York Times suggests.
So for now, Model 3 production and sustainable profits will take precedent over any plans to privatize the company. It means that Musk will have to contend with slow-moving shareholder decisions — and, yes, even the short-sellers — as the company works furiously to meet its ambitious production deadlines. Now, Musk and his team are working to meet them under even more scrutiny from regulators and from shareholders, and with more competition — the Saudi Public Investment Fund recently made what is likely a billion-dollar deal with Lucid Motors, another electric car company vying for the same milestones and clientele as Tesla.
Musk hasn't given up the dream of privatizing Tesla. In fact, the whole back and forth about privatizing Tesla seems to have reassured him that "there is more than enough funding to take Tesla private," he writes in the blog post (though who exactly would be paying for that remains unclear).
More on Tesla and the future of electric vehicles: Electric Cars Are Too Important For Elon Musk to Put at Risk