DETRIOIT -- CEO Elon Musk said Friday that investors have convinced him that he shouldn't take the company private, so the firm will remain on the public stock markets.
The eccentric and sometimes erratic CEO said in a statement that he made the decision based on feedback from shareholders, including institutional investors, who said they have internal rules limiting how much they can sink into a private company.
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Musk met with the electric car and solar panel company's board on Thursday to tell them he the company to stay public and the board agreed, according to the statement.
In an Aug. 7 post on Twitter, Musk wrote that he was considering taking the company private. He said it would avoid the short-term pressures of reporting quarterly results. The tweet said funding had been secured for the deal, but the company later said the details still had to be worked out with Saudi Arabia's Public Investment Fund.
The tweet said Tesla would offer $420 per share, 23 percent above the Aug. 6 closing price. If all the shares were bought, the deal would be worth $72 billion, but Musk later said he expected only one-third of stakeholders to agree to the buyout.
The bizarre tweet, written while Musk was driving to the airport, brought an inquiry from the U.S. Securities and Exchange Commission, which reportedly is looking into whether he was trying to manipulate the share price. It since has fallen.
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In the statement, Musk said he worked with investment firms Goldman Sachs, Morgan Stanley and Silver Lake to consider all the options, and he talked to investors.
"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," Musk wrote in the statement.
He wrote that his belief that there was more than enough funding to take the company private "was reinforced during this process."
Musk wrote a letter to the public about the decision:
Earlier this month, I announced that I was considering taking Tesla private. As part of the process, it was important to understand whether our current investors believed this would be a good strategic move and whether they would want to participate in a private Tesla.
Our investors are extremely important to me. Almost all have stuck with us from the time we went public in 2010 when we had no cars in production and only a vision of what we wanted to be. They believe strongly in our mission to advance sustainable energy and care deeply about our success.
I worked with Silver Lake, Goldman Sachs and Morgan Stanley, who have world-class expertise in these matters, to consider the many factors that would come into play in taking Tesla private, and to process all the incoming interest that we received from investors to fund a go-private transaction. I also spent considerable 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 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."
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, I met with Tesla's Board of Directors yesterday and let them know that I believe the better path is for Tesla to remain public. The Board indicated that they agree.
Moving forward, we will continue to focus on what matters most: building products that people love and that make a difference to the shared future of life on Earth. We've shown that we can make great sustainable energy products, and we now need to show that we can be sustainably profitable. With all the progress we've made on Model 3, we're positioned to do this, and that's what the team and I are going to be putting all of our efforts toward.
Thank you to all of our investors, customers and employees for the support you've given our company. I'm incredibly excited to continue leading Tesla as a public company. It is a privilege.
Musk says investors convinced him Tesla should stay public