Tesla Inc. (NASDAQ: TSLA)
Shares of Tesla dipped 5% during early hours of regular trading in New York on Monday, after CEO Elon Musk backpedaled his plans to take the electric carmaker private. Germany-listed shares in Tesla dropped more than 3% to $263.50.
Tesla revealed through a blog post released late Friday that it will continue operating as a public company. The news came several weeks after Musk shocked Wall Street with a tweet saying he was considering taking the Silicon Valley company private at $420 per share, adding “funding secured”.
In Friday’s post, the chief executive explained his decision saying, “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. Additionally, a number of institutional shareholders have explained that they have internal compliance issues that limit how much they can invest in a private company.”
Musk continued, “There is also no proven path for most retail investors to own shares if we were private. 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.”
On Aug. 8, The Wall Street Journal reported that the US Securities and Exchange Commission is probing Musk’s tweet. Securities lawyers say his decision to suddenly reverse plans to take Tesla private will not put an end to his escalating regulatory troubles.
Stephen Crimmins, an attorney who prosecuted multiple securities cases while working at the SEC for more than a decade said, “The SEC will continue its investigation until it’s satisfied that it is on top of the facts. What happened on Friday will be of interest to the SEC because it will allow them to probe whether Musk’s pulling back from the go-private somehow indicates that he did not have a reasonable basis for his statement. They will be asking questions of him and others involved in the decision as to why he reversed course.”
Tesla Inc. Company Profile
Tesla, Inc. designs, develops, manufactures, and sells electric vehicles, and energy generation and storage systems in the United States, China, Norway, and internationally. The company operates in two segments, Automotive, and Energy Generation and Storage. The Automotive segment offers sedans and sport utility vehicles.
It also provides electric vehicle powertrain components and systems to other manufacturers; and services for electric vehicles through its company-owned service centers, Service Plus locations, and Tesla mobile technicians. This segment sells its products through a network of company-owned stores and galleries.
The Energy Generation and Storage segment offers energy storage products, such as rechargeable lithium-ion battery systems for use in homes, commercial facilities, and utility grids; designs, manufactures, installs, maintains, leases, and sells solar energy systems to residential and commercial customers; and sell renewable energy to residential and commercial customers.
The company was formerly known as Tesla Motors, Inc. and changed its name to Tesla, Inc. in February 2017. Tesla, Inc. was founded by Elon Musk, Marc Tarpenning, Jeffrey B. Straubel, and Martin Eberhard. –YahooFinance
Sources
https://www.reuters.com/article/tesla-musk-governance/rpt-musks-u-turn-on-tesla-deal-could-intensify-his-legal-regulatory-woes-idUSL2N1VI09W
https://www.marketwatch.com/story/tesla-stock-drops-after-musk-axes-go-private-plan-but-baird-analyst-sees-a-silver-lining-2018-08-27
https://www.tesla.com/blog/staying-public
