Elon Musk’s weekend treat: Tela’s not going private!
Well, it was fun while it lasted. Or terrifying, you choose. Either way, as of the weekend just gone, we now know that it’s over: Elon Musk’s plan to take Tesla private is officially scrapped. While observers were torn on whether Musk might be more effective as the head of a private company, this development is probably good in at least one way: the company’s share price might gain a little bit of stability!
Tesla’s been on a wild ride this year, jostled up and down by issues over production and the possibility of going private (+3.68% year to date)
SOURCE: Yahoo Finance
In a blog post published late on Friday, Musk wrote that he had met with the board and “let them know that I believe the better path is for Tesla to remain public. The board indicated that they agree.”
Musk added that he still hewed to the “belief that there is more than enough funding to take Tesla private,” but bemoaned the distractions such a path would cause – as well as the length of time it would take to effect!
“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’s blog continues “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.’”
Stephen Diamond, an associate professor of law at Santa Clara University, who specializes in corporate governance, suspects that Musk’s hand was slightly more forced than he lets on. Diamond said: “My guess is that the large institutional investors said to Elon ‘this all sounds a little half-baked. The board called his bluff. The clock was ticking on the class period of all of these shareholder lawsuits. Hiring Goldman Sachs and Morgan Stanley gave Musk cover, but they had to cut off the damage and end the charade.”
Dominion holds Tesla in its Global Trends Luxury Fund.
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