Tesla shares drop after Musk abandons buyout plan

Tesla shares drop after Musk abandons buyout plan

As Musk admits: "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'".

In a late-night blog post on Friday Musk said that "most of Tesla's existing shareholders believe we are better off as a public company".

Investors in Tesla's bonds and convertible debt also had shown skepticism that the buyout would materialize during the days after that tweet, and a subsequent blog post in which Musk made a case for going private.

It was on August 7 that Musk first surprised investors with his plan by tweeting that he had "funding secured" for a go-private deal, which would have had a value of $72 billion.

Surely, though, it wasn't just because people didn't like it that Musk reversed course.

Trump announces trade deal with Mexico, Canada on sidelines
Adam Austen, who speaks for the foreign affairs minister, says Canada had been in regular contact with the NAFTA negotiators. But as with many of Trump's declarations of victory, it's far from clear that this deal will be realized.

The process of going private was expected to be challenging, but now it's clear that it could have been even more time-consuming and distracting than initially anticipated, Tesla's chief executive noted, adding that the company "absolutely" must stay focused on ramping Model 3 production and becoming profitable. On top of that, there were concerns about potential fallout from shareholder lawsuits and the SEC investigation, the people said.

Musk blinked partly because pulling off a buyout might require getting into bed with competitors, according to the Wall Street Journal, which reported that German auto giant Volkswagen was prepared to team up with Silver Lake to invest as much as $30 billion into the endeavor.

Musk had hired advisers including Goldman Sachs Group Inc. and Silver Lake as well as Morgan Stanley.

It remains unclear what Musk meant by "funding secured". The company has said it expects to make 50,000 to 55,000 Model 3s in the quarter, which averages to roughly 4,200 vehicles a week at the higher end of the guidance.

Tesla also said on Sunday it was not searching for a chief operating officer - a No. 2 executive that critics claim Musk badly needs, as his micromanaging ways have lately led to him to sleep on the floor of Tesla's factory in Fremont, Calif. It's created a new layer of questions for investors. People close to Musk have said that he might have been "overly simplistic" in his thinking, the New York Times suggests.

Related Articles

  • 4 takeaways from the U.S.-Mexico trade deal

    4 takeaways from the U.S.-Mexico trade deal

    Trump's announcement includes plans to wrap up negotiations between the U.S., Canada and Mexico by Saturday at the latest. They will now likely re-engage with Canada to reach a final deal on NAFTA, a primary goal of the Trump administration.
    Trump bows to pressure, lowers flags again to honour John McCain

    Trump bows to pressure, lowers flags again to honour John McCain

    The American flag that flies above the White House was at full staff on Monday-shortly after it was lowered in honor of Sen. Congressional leaders announced that McCain would lie in state in the Capitol Rotunda, though they did not give a date.
    Cohen's lawyer walks back claim Trump knew of Russian Federation  meeting

    Cohen's lawyer walks back claim Trump knew of Russian Federation meeting

    Where does this fit in? Before the latest development, 46 percent of American voters approved of Trump's job performance. Attorney's Office in Manhattan, which has been leading the Cohen probe, declined to comment, as did the White House .
  • Pompeo vows USA  will 'vigorously defend' against Iran court challenge

    Pompeo vows USA will 'vigorously defend' against Iran court challenge

    The US and Iran have clashed at the court in the past since they became enemies after Iran's 1979 Islamic Revolution. Washington aims to force Tehran to end its nuclear program and its support of militant groups in Syria and Iraq.
    Mourinho applauds fans, praises players after Spurs loss

    Mourinho applauds fans, praises players after Spurs loss

    However, Tottenham gradually muscled their way into the game and were clinical in front of the net during the second half. He even said he thought his team could have been up 3-0 in the first half, while also applauding the fans.
    South Korea sends sanctioned material to North Korea, politician says

    South Korea sends sanctioned material to North Korea, politician says

    Biegun, who served as the company's vice president of global governmental affairs, would travel with him to North Korea next week. Pompeo on the phone on Saturday, expressing regrets over the cancellation of Mr.
  • Pope ‘refuses to deny’ explosive accusations that he ‘COVERED UP’ sex abuse

    Pope ‘refuses to deny’ explosive accusations that he ‘COVERED UP’ sex abuse

    He said the sanctions were put in place in 2009 or 2010 but did not recall an exact date. The accusations have created a crisis of confidence in the USA and Vatican hierarchy.
    Alonso treating Formula 1 exit as a

    Alonso treating Formula 1 exit as a "goodbye"

    But he admitted the decision came after some soul-searching about his future and whether he even wanted to carry on racing. By no means was it an easy decision at all and I feel I just got to a point where I felt I was ready for a change.
    Biden to speak at McCain's funeral service in Arizona

    Biden to speak at McCain's funeral service in Arizona

    In July, after Trump held a friendly news conference with Russian President Vladimir Putin, McCain issued his sharpest rebuke yet. The president said he liked those who were not captured better. "Our hearts and prayers are with you!" he tweeted instead.
  • Cindy And Meghan McCain Mourn John McCain With Heartbreaking Tribute

    Cindy And Meghan McCain Mourn John McCain With Heartbreaking Tribute

    Lindsey Graham, a very close friend of McCain at the senate, said: "America and Freedom have lost one of her greatest champions". CNN reported in May that the McCains did not want Trump at his funeral. " John McCain was my friend".
    US Senator John McCain dies at 81

    US Senator John McCain dies at 81

    Since then tributes have been pouring in for McCain, who was operating as a Senator in America until 2017. He stressed that McCain's "voice for civility" was especially important this past year.

    Here's how the US-Mexico trade deal would differ from NAFTA

    Donald Trump has officially proven you do not need to understand speakerphone to become President of the United States. But Trump has called the agreement "the worst deal maybe ever signed" and moved ahead with tariffs earlier this year.