Tesla shares news: Musk in U-turn on taking car maker private

Tesla shares closed higher in the US Friday, ahead of a blog post from CEO Elon Musk stating that he now believes the best path for the company is to remain public.

Tesla shares news: Musk in U-turn on taking car maker private

Tesla shares ended higher in the US Friday, ahead of a blog post from CEO Elon Musk stating that he now intends to keep the electric car maker public. The U-turn may be welcome by shareholders; however, US regulators may take a different view of Musk’s communication style and comments.

Tesla shares ended the US Friday session 0.85% higher at $322.82. The stock is currently a little lower in out-of-hours activity.

Tesla to remain public

Following tweets and blog posts from Musk that he believed the best forward path for his electric car manufacturing firm was to become a private company, he stated in another blog post that after taking advice and looking at the process of becoming private, more closely, he now believes that remaining public is the right thing for Tesla.

Musk adds that the majority of existing major Tesla shareholders agree with his updated view.

“After considering all of these factors, I met with Tesla’s Board of Directors yesterday and let them know that I believe the better path is for Tesla to remain public. The Board indicated that they agree,” Musk said.

“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. We’ve shown that we can make great sustainable energy products, and we now need to show that we can be sustainably profitable,” Musk added.

Regulatory concerns

While the future path for Tesla is now clear and investors and staff can carry on as they did before Musk discussed taking the business private, there will likely be some regulatory repercussions from this period in Tesla’s operational history.

Even before Musk initially tweeted his view on potentially taking Tesla private, the US SEC were reportedly making a case to investigate the company’s communication style.

In the US, executives of public companies must have a “reasonable basis” on which they inform the investing public of any plans.

Now that Musk has rejected the option to go private, there’s a chance that the regulators could consider his initial tweet didn’t share a genuine view. Instead it might be thought that it was made just to manipulate the stock price.

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