Car Industry

Never mind the 420 jokes, Tesla's staying public

A tweetstorm that kicked off a flurry of speculation has now been officially put to bed: Tesla's not going private.

Steven Ewing/Roadshow

In a storm of Twitter messages that seemingly dropped a lifetime ago but are actually less than weeks old, Tesla CEO Elon Musk kicked off an amazing amount of speculation and news that he'd be taking the EV-maker private. Now, in an open letter and in no uncertain terms, Musk has confirmed that's not the case: Tesla is staying a public entity.

In his now (in)famous August 7th message on Twitter, Musk indicated he was considering taking Tesla private at a price of $420, leading many to wonder whether it was a joke.

However, in a series of follow-up messages, Musk made it clear he was serious, indicating that current investors could sell at $420 or continue on with shares in the private entity. Musk even indicated that he'd secured funding for this move, something that would require billions of dollars to pay out those investors who didn't trade in their shares. 

However, as would quickly become apparent through a flurry of releases and statements from various potential partners, funding hadn't been secured. Tesla's board members indicated that discussions had been ongoing, but in a statement released Friday night, Musk made it clear those discussions have ceased.

Musk laid out the primary reasons for staying public, the first and most important being his receiving feedback that "most of Tesla's existing shareholders believe we are better off as a public company" -- either due to restrictions on ownership of private shares or simply due to the very muddy process of moving from public to private. Additionally, Musk said this would be a "challenging" and "distracting" process. 

Musk's reasons for wanting to go private are clear enough -- his SpaceX company has flourished without the oversight and transparency required of a public entity -- but all this still leaves one major question: why he'd make such a public statement about going private in the first place. That's a question to be answered by the potential SEC investigation.

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