Elon Musk has abandoned his plan to take Tesla private, and said shareholders had persuaded him against the idea.

The electric carmaker’s founder shocked investors earlier this month after tweeting that he was considering taking the company, which floated in June 2010, private.

In a statement on Friday night Musk announced he had decided against the move based on feedback from shareholders, including institutional investors, who said they had internal rules that limited the stake they could hold in a private company.

The plan was cancelled after a board meeting on Thursday, Musk said. “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’,” he wrote in the blog post.

Musk initially considered privatisation because he said it would avoid the short-term pressures of reporting quarterly results.

In his tweet announcing the move, which was written while he was driving to the airport, he said funding had been secured for the deal. The company, however, said later that the details still had to be worked out with Saudi Arabia’s sovereign wealth fund.

Am considering taking Tesla private at $420. Funding secured. — Elon Musk (@elonmusk) August 7, 2018

Musk said Tesla would offer $420 a share - 23% above the stock’s closing price on 6 August, and valuing the company at $72bn. He later said he expected only a third of shareholders would not want to remain investors in Tesla, meaning far less funding would have been needed for the deal.

The tweet prompted inquiries by the US financial regulator, the Securities and Exchange Commission, which was reportedly looking into whether he was trying to manipulate the share price. It since has fallen by 20%.

Taking the company private would have freed Tesla from having to make quarterly financial reports to the stock market and abide by strict governance rules.



Musk said he had worked with the investment firms Goldman Sachs, Morgan Stanley and Silver Lake to consider all options, and that he had also talked to investors.



“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,” Musk wrote.

He said his belief that there was more than enough funding to take the company private “was reinforced during this process.”



Tesla has faced growing financial pressures this year as it works to build more of its Model 3 cars. He told the New York Times that he had an “excruciating” year leading Tesla.

The company reported another record loss on 1 August, but Musk said he expected it to be profitable in the second half of 2018 and beyond.