Musk Scraps Plan To Take Tesla Private

Chief Executive Elon Musk pauses during a news conference in Tokyo

Chief Executive Elon Musk pauses during a news conference in Tokyo

Abandoning the plans, however, does not eliminate the concerns that led the SEC to launch a formal investigation into the company in the first place.

Surely, though, it wasn't just because people didn't like it that Musk reversed course.

According to an open letter Musk wrote to shareholders on Friday, he anxious that too many small investors would not be able to participate, and that current large Tesla institutional shareholders would have to sell their interests.

The trading on Monday will be a test of how investors are taking the demise of the buyout plan, and their views on whether Musk, who owns about a fifth of Tesla, can avoid going back to capital markets to raise more cash. NY time before US exchanges opened.

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The high price investors have put on Tesla's shares has allowed Musk to expand U.S. production, invest in building out a vehicle charging network and start work on new models including a small sport utility vehicle, a new Roadster and a semi-truck even as the company burned cash. Going private, Musk added, "would be even more time-consuming and distracting than initially anticipated". Kallo recommends buying the stock, saying it will rebound to above US$400 as the company shows progress in increasing output of Model 3 vehicles. Several investors have also sued Tesla, alleging that Musk's announcement was meant to manipulate the price of the company's stock. "The sentiment, in a nutshell, was 'please don't do this, '" Musk wrote.

The following Securities and Exchange Commission (SEC) investigation didn't help Elon's cause, further jeopardizing the financial future of the company.

Musk's vocal ambitions stirred unease among Saudi officials about the publicity surrounding their potential role, according to people familiar with the matter who asked not to be identified.

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. In an August 13 statement, Musk said that he left a July 31 meeting with the managing director of Saudi Arabia's sovereign wealth fund "with no question that a deal ... could be closed".

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