More than two weeks after Elon Musk took everyone by surprise with a haphazard pitch to take Tesla private, without any substantive proposal in place at the time, the automaker’s CEO is now scrapping the plan.
In a blog posted at the very normal time companies break news of roughly 11:15 p.m. on a Friday, Musk said he made the decision after receiving feedback from investors, saying “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,” Musk wrote. “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.’”
(Nearly everyone who examined his initial idea to keep retail investors in place found it not practical.)
Musk also said he believed the take-private bid would be “even more time-consuming and distracting than initially anticipated,” at a time “absolutely must stay focused on ramping Model 3 and becoming profitable.”
The billionaire—who set off a Securities and Exchange Commission investigation and sparked off several lawsuits because of the tweet—met with Tesla’s board of directors on Thursday and, after considering the relevant factors, said that he now believes the “better path” for Tesla is to remain public. The board agreed.
“The Board and the entire company remain focused on ensuring Tesla’s operational success, and we fully support Elon as he continues to lead the company moving forward,” the board said in a statement.
The abrupt reversal ends a frenzy that led to intense speculation about what Musk was thinking at the time he fired off the tweet. In an extraordinary interview with The New York Times, Musk said he sent the Aug. 7 tweet that he had “funding secured” to take Tesla private while driving himself to the airport. Tesla’s shares spiked immediately, and in the intervening days, it became evident that wasn’t the case.
Musk said in a blog post on Aug. 13 that he believed Saudi Arabia’s sovereign wealth fund had enough funding to support the take-private bid on its own, and in the late night Friday post he doubled down and said he still believes “that there is more than enough funding” to take Tesla private. It is still unclear what, if any, backers he’d secured for the proposal.