Tesla Shares Drop Early Monday After Musk Abandons Plan to Take Company Private

8:56 AM, Aug 27, 2018 — Tesla (TSLA) shares were down 2.6% in pre-bell trading after Chief Executive Elon Musk said in a blog post on Friday that he will not attempt to take the company private.

He said in the post that it was “important” for him to understand whether investors agreed with the idea and thought it was a good move. Musk said after working with Silver Lake, Goldman Sachs (MS) and Morgan Stanley (MS) and listening to shareholders, he decided to keep Tesla a publicly traded entity.

“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,” he said. “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 earlier this month said in a Twitter post that he had the funding to make the company closely held, and hired Goldman and Morgan Stanley as advisers. The company would have had a valuation of somewhere around $72 billion. That Twitter post is now the subject of an SEC investigation and several investor lawsuits.

The company needs to focus on increasing Model 3 production, he said. Musk said he and his team will now focus on making Tesla a profitable company.

“Moving forward, we will continue to focus on what matters most: building products that people love and that make a difference to the shared future of life on Earth,” he said. “We’ve shown that we can make great sustainable energy products, and we now need to show that we can be sustainably profitable. With all the progress we’ve made on Model 3, we’re positioned to do this, and that’s what the team and I are going to be putting all of our efforts toward.”

Companies: Tesla, Inc.
Price: 314.30 Price Change: -8.52 Percent Change: -2.64

Get Live Briefs Pro