Musk won’t take Tesla private after all

The news broke late on Friday

A little over two weeks ago, Elon Musk tweeted that he was planning to take Tesla private at $420 a share. The market, if you'll remember, went nuts. Tesla shares skyrocketed, the SEC investigated, and the Saudis demurred (eventually backing rival Lucid, instead). It was a wild ride, and even wilder if you were following Elon's personal life and his unconventional interview with The New York Times.

And now, the "going private" part of the wild ride that was, and likely shall remain, part of the Tesla experience is over. Both Elon Musk ( on Tesla's blog) and the board of directors of Tesla issued statements saying that, after consideration, Musk has decided against the move. Tesla will remain public.

Musk's statement centers heavily on how the company's investors reacted to the move. His initial rationale was to decouple the company's long-term future from a situation in which quarterly earnings are the measure of success — essentially, a bid for future health at the expense, perhaps, of short-term profits. Also, removing some incentive from short sellers to attack the company, as Musk put it. Apparently, his investors didn't see it that way.

Musk reveals a few things in his new statement about staying public that he probably should have considered more thoroughly before making the move in the first place. His large, institutional investors apparently educated him about "compliance issues" that limit investments in private companies. And retail investors didn't have a clear path forward while still owning shares. Perhaps a failure of due diligence?

Whatever happened, it seemed to convince Musk that the rate at which Tesla is burning money is unsustainable. Another rationale is his desire to focus on ramping Model 3 production to staunch the bleeding, saying, "We will not achieve our mission of advancing sustainable energy unless we are also financially sustainable."

One thing is clear: Musk isn't backing down on his now infamous assertion: "Funding secured." He says in his statement, "My belief that there is more than enough funding to take Tesla private was reinforced during this process." Whatever the case, it's a moot point (except maybe with the SEC).

This entire episode has cast a renewed focus on Model 3 production issues and the company's overall profitability, and since the bid to go private has been abandoned, Tesla remains responsible to its investors to make a profit for them. If anything, the spotlight has intensified, and Tesla's next earnings report will be examined as closely as production numbers will be in the meantime. It's not clear what long-term effect this will have on Musk's tenure at the helm, or the company's long-term viability, but for now Musk retains the confidence of the Board. We'll see what the future brings.

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