Ilon Mask abandoned plans to turn Tesla into a private company
The head of Tesla Inc, Ilon Mask, wrote in a corporate blog that he refuses the idea of turning the company into a private one. Musk told the board of directors that it’s better for the company to remain public so that its shares are traded on the stock market. The Board of Directors, not surprisingly, agreed with this point of view, since the majority of its members adhere to the same point of view.
Mask said that the decision was made after a series of consultations with shareholders of his company. “Most of the shareholders I contacted said they would stay with Tesla even if the company becomes private,” the businessman says. At the same time, the general mood of the shareholders can be expressed by the phrase “you should not do this”.
Some investors said that the “internal rules” prohibit them from participating in private companies.
It seems that this message put an end to Mask's plans, which he unexpectedly announced at the beginning of this month. On August 7, he stated that he was considering the possibility of selling Tesla to private investors. Then he said that the company could be sold subject to an increase in the value of the shares to $ 420 per unit. Immediately after Mask’s announcement, his company's shares rose 8%, and then another 3%. However, after some shareholders of the company announced their intention to sue, the positive growth dynamics changed to negative.
The businessman believes (in any case, as he stated back in 2017) that the work of the company will be more efficient if it turns out to be in private hands. If the transformation could have been carried out, then, according to Mask, Tesla Inc would decrease the level of external pressure. Now, as an open company, it is under the supervision of both regulators and market participants.
After just a few days after Mask sent tweets with information about the possibility of the company going into private hands, the shareholders sued him. The partners of the businessman said that the sale is a violation of the federal law on securities, in addition, it violates the law on the protection of investors' rights.
Some time after the statements of the entrepreneur, it turned out that he was negotiating to buy Tesla shares with the Public Investment Fund (PIF) sovereign fund of Saudi Arabia. It is this organization that can participate in the process of withdrawing Tesla from the stock exchange. According to the fund, Riyadh plans to protect itself from future risks in the oil market by entering Tesla Inc.
A little later, it turned out that negotiations with the sovereign fund did not reach detailed discussions on the financing of the transaction. It was about negotiations at the earliest stage.
The other day Musk made another statement - he said that the current year was the most difficult and painful in his career. Maybe it affected his emotional state and provoked a number of harsh Twitter messages, for example, about expert opinion on his mini-submarine, created to rescue teenagers who were captured by the elements in Thailand. Some sources even told the Times that members of the Mask board of directors told him that "it’s time to throw Twitter and start building cars and launching rockets more closely."
Mask even had to apologize for his statements, both for commenting on the “boring and stupid” questions of analysts regarding Tesla's work and company losses, and for commenting on the diver who saved the children of Thailand, as mentioned above.
As for the refusal of Tesla to go private, Mask, according to him, initially counted on a simpler conversion process. When difficulties arose, he realized that he could not spend time on solving new problems, because all efforts should be focused on the production of Tesla Model 3 electric vehicles.
Now Mask works 120 hours a week, staying at Tesla factory for several days in a row without leaving the street and not meeting with family and friends. The only thing that the entrepreneur allowed himself to attend was his brother's wedding in Spain, and he flew in for only two hours, and then immediately went back to the factory.
To relieve Mask, the Tesla board of directors is actively looking for an employee for the position of operations director. True, the search has been underway for about two years, but now, seeing the problems of the head, the board of directors has become more active.