“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,'” a statement from Musk said.
Among their objections, Musk said some investors noted that they have “internal compliance issues that limit how much they can invest in a private company.”
Musk added that time and money also motivated the decision.
“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,” Musk said. “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.”
Musk announced the decision Friday after meeting with the board of directors Thursday to let them know he believed staying public was the best move going forward. The board agreed.
Tesla halted trading on Aug. 7 because Musk said on Twitterhe was considering taking the company private and had secured enough funding to do it. A week later, Tesla formed an independent special committee to explore the possibility.
Stocks jumped more than 10 percent after Musk announced the company would consider taking Tesla private, and Securities and Exchange Commission Chairman Harvey Pitt voiced concern.
“If his comments were issued for the purpose of moving the price of the stock, that could be manipulation, it could also be securities fraud,” former SEC Chairman Harvey Pitt told CNBC. “The use of a specific price for a potential going private transaction is highly unprecedented and therefore raises significant questions about what his intent was. So, that would have to be investigated.”
The SEC probe into his Twitter post about considering taking the company private could last for months, Fox Business reported.
