Breaking news, Elon musk recently dropped off a $72 billion pursuit on taking the electric vehicle firm private after a previous statement on tweeter on taking the company private by purchasing all the existing shares a a specific amount. On Friday, Musk said that due to new regulatory scrutiny, he will drop all pursuit on the luxurious electric car and stretch his hands to investors who previously wanted to invest into the company through purchasing of the shares which musk himself wanted to purchase and make the company a private firm.
However, musk on a blog post said that the future of the company depends with publicity of the company. Considering his last tweet was that he was setting aside all the shares at a price of $421 per share, this was not enough for the investors. The investors went to court with a series of lawsuit which the US security sector had to check on the accuracy of Musk tweet.
Nevertheless, must dropped the pursuit saying that abandoning of the pursuit was after advise from most of the shareholder. However, most of the shareholder said they would still support him if he still wanted to privatize the firm. They said in an interview that this was a nutshell considering musk idea on returning profits once the company becomes a private firm.
Musk in a briefing on Friday said that considering the firms resources, there is enough to make the company private but after considering advise and checking on the market startegy and anticipation of the future of Tesla, then the firm would rather remain public to any investor out there than locking the investors out. He stated also in the briefing that for a company to go private of public, two things play part. One, the process is time consuming and two, the procedures are distracting than expected and considering the company stance, there is no time to waste since this could mean losses on the way.
Abandoning of this pursuit was the clever thing to do according to musk and from the advice acquired from shareholders of the company. Musk concluded that if the pursuit is considered, then the company would end up with a $11 billion debt pile and most importantly a negative flow in terms of cash.