The market speaks on Tesla.
Tesla (TSLA) - Get Tesla Inc Report shares were indicated sharply lower again Monday in pre-market trading after founder and CEO Elon Musk said late Friday that he was abandoning plans to take his company private following consultations with major investors.
Musk said the majority of his investors felt that the prospect of taking the company private wasn't a feasible option, owing to internal requirements within some fund that limit the amount they can invest in non-public companies and the difficulty the some private investors would have in converting their listed shares into ownership of a private corporation.
The U-turn marks the end of a 20-day saga for the Palo Alto, Calf.-based carmaker that has both ignited serious concerns over the ability of Musk to lead a listed company on his own as well as a reported investigation by the SEC over the nature of his communications on Twitter and whether they have violated U.S. securities regulations.
"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," Musk said in a statement published by Telsa's official Twitter account Friday. "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."
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Tesla shares were seen 4.62% lower in pre-market trading, indicating an opening bell price of $307.90, a move that would lop around 19.3% from the carmaker's shares since Musk Tweeted his infamous "taking Tesla private" message on August 7.
"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", Musk wrote. "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," he added.