Investors now must brace for another potential wild ride when USA trading opens Monday, while regulators and lawyers autopsy what happened to a deal potentially valued at US$82 billion and Tesla's board is left with a brilliant but exhausted and erratic chief executive officer.
After receiving feedback from investors, Musk said that "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". The U.S. Securities and Exchange Commission is now investigating his tweets and blog posts, which triggered the stock gyrations throughout August.
"Historically, we have been able to generate significant media coverage of our company and our vehicles, and we believe we will continue to do so", Tesla said in its most recent 10-K. Large institutional shareholders had limits on how much they could invest in a private company, and there was no proven path for most retail investors, who are among his most ardent and adoring fans. Could the SEC investigation have played a role?
Earlier this month, Musk startled investors and industry experts when he announced on Twitter that he was considering taking Tesla private when its shares reached $420, and that he had already secured the funding for the transition.
Well, turns out that deal was not exactly done, the funding far from secured.
Shares of Tesla are slipping on the first day of trading after the electric vehicle maker said it won't consider going private after all.
Musk had hired advisers including Goldman Sachs Group Inc. and Silver Lake as well as Morgan Stanley.
Lawsuits against Mr Musk, co-founder and chief executive of Tesla, "could linger for a year", Gene Munster, managing partner at Loup Ventures, a venture capital firm, said. It finally became clear, by Musk's own admission, that it was not.
Musk also indicated he was unaware how challenging the process would be and did not want to distract from the goal of ramping up production of the Model 3 sedan.