Tesla will remain a public company, Elon Musk says

By TeslaFOXBusiness

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Tesla will remain a publicly traded company, CEO Elon Musk wrote in a company statement released Friday night, just weeks after the billionaire inventor suggested that he might take the electric-car maker private to alleviate quarterly earnings pressure and reduce wild stock-price swings.

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“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,’” Musk wrote.

Musk sent shares into a frenzy in early August when he wrote in a tweet that he was considering taking the company private at $420 per share and had already secured the necessary funding. Shares soared on the news, and although briefly halted by the Nasdaq, resumed trading, ultimately rising more than 10%.

That tweet, however, spurred the U.S. Securities and Exchange Commission to launch an investigation into the veracity of Musk’s statement. The San Francisco office of the SEC has sent subpoenas to Tesla regarding its privatization plans to determine whether Musk intentionally misled investors, according to FOX Business’ Charlie Gasparino.

Although Tesla's board did not confirm any funding plans at the time, Musk outlined additional details in a blog post, noting he was all but certain to have landed the investment from the Saudi sovereign fund in July. And in the most-recent statement, Musk wrote that his belief was reinforced during this process that there is “more than enough funding” to take Tesla private. Still, that doesn't confirm his statement, considered "material" and likely problematic for the SEC.

Tesla has hired two law firms in response to the investigation: Paul, Weiss, Rifkind, Wharton & Garrison to help deal with the SEC, and Latham & Watkins to advise on privatization.

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In a wide-ranging interview with The New York Times, Musk admitted that he’s overwhelmed by job stresses, works up to 120 hours a week and sometimes takes Ambien in order to sleep.

Tesla has presented a number of challenges for Musk: The company routinely loses money and is burning through cash as it ramps up development of its Model 3 sedan, a less-expensive electric car it hopes appeals to the mass market. A large number of investors, known as short-sellers, have also bet against the company.

But, the eccentric billionaire said that after consulting with Silver Lake, Goldman Sachs and Morgan Stanley to consider the factors in taking Tesla private – and speaking with shareholders, most whom expressed their disinterest for the plan – he decided to stay public.

“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,” he wrote. “This is a problem because we absolutely must stay focused on ramping Model 3 and becoming profitable.”

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