(Reuters) - Shares in Tesla Inc TSLA.O fell just under 3 percent on Monday after Chief Executive Elon Musk abandoned his plan to take the electric carmaker private, with analysts saying the company needed new blood among senior management to prop up its standing with investors.

The billionaire entrepreneur said in a blog post late on Friday that consultations, done with the help of Goldman Sachs and Morgan Stanley, had shown most of Tesla’s existing shareholders opposed the deal that he proposed on Twitter three weeks ago to widespread shock on Wall Street.

“We are hopeful that ... the past 17 days will lead the Board down the path to bringing on a more operational CEO or at a minimum a COO,” Cowen and Co analysts said in a note to clients.

Tesla’s shares, already down nearly 15 percent from a peak on Aug. 7 when Musk tweeted that he had “funding secured” for a buyout at $420 a share, initially fell more than 5 percent in European and premarket trading in New York.

They recovered, however, to stand down just 2.8 percent lower at $314 by 8.30 e.t..

Notes from Wall Street analysts questioned Musk’s credibility going forward in the face of a possible investigation by the U.S. Securities and Exchange Commission into the factual accuracy of an Aug. 7 tweet that funding for the buyout deal was “secured”.

“Musk’s involvement in the company is critical, but now more than ever a solid #2 - someone with strong operational background that can help Tesla move from ideas to execution - is crucial,” analyst Joseph Spak from RBC Capital Markets wrote in a client note.

Tesla said on Sunday it was not searching for a chief operating officer.

“While we are always looking for highly talented executives (...) there is no active COO search,” a spokesman said by email.

FILE PHOTO: Tesla superchargers are installed at the Quinte Mall in Belleville, Ontario, Canada, May 6, 2018. REUTERS/David Lucas/File Photo

With Musk’s idea for a buyout backed by Saudi Arabia’s sovereign wealth fund now off the table, attention was zeroing in on Tesla’s efforts to become profitable, its cash reserves and what steps Musk could take to raise fresh capital.

Tesla had $2.78 billion in cash at the end of the second quarter, after a record $718 million loss.

In early August, before the buyout plan was made public, Tesla reiterated a forecast that it would achieve a profit in the third and fourth quarters, under normal accounting rules, and Musk said the company would not need to raise more cash.

A Tesla spokesman on Sunday also referred back to those previous comments.

“With its long term mission intact but short term growth shaky, serious gaps in execution skills and a board under pressure for not assuming its duties, now may be the time for third parties to get involved, be it from technology or even oil,” Jefferies analyst Philippe Houchois told clients.

One of Tesla’s biggest challenges is ramping up production of its latest vehicle, the Model 3, which is critical to its profitability goals.

Monday’s fall would still leave shares in the company 27 percent above a low of $244.59 hit on April 2, a day before the electric carmaker released its production and Model 3 deliveries report for the first quarter.

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Investors in Tesla’s bonds and convertible debt had also already shown skepticism that the tens of billions of dollars needed for the buyout would materialize, unconvinced by Musk’s tweet or subsequent blog post in which he could only make the case for going private and not list clear backing.

Analysts have suggested a capital raise may be required soon to boost investor confidence but investment bankers who are not working for the company said over the weekend it would also contradict Musk’s promise that Tesla is adequately funded.

This week would also be an inopportune time for a capital raising, given that many bankers and investors are away ahead of the Sept. 3 Labor Day holiday.

“We see the company raising $2 billion in 4Q18, through convertible debt, which may prove a challenge if there still is an ongoing SEC case open,” Cowen and Co analyst Jeffrey Osborne wrote in a client note.

The high price investors have put on Tesla’s shares has allowed Musk to expand U.S. production, invest in building out a vehicle charging network and start work on new models including a small sport utility vehicle, a new Roadster and a semi-truck even as the company burned cash.

Tesla earlier this year announced plans to build a battery and vehicle assembly complex in China. Musk said earlier this month that the company’s “default plan” would be to fund that expansion by borrowing money from Chinese banks.