Tesla’s (NASDAQ:TSLA) Chairman said His EV Company “will remain public”
- Late Friday When Wall Street Was Asleep, Musk Declared Tesla Will Remain Public
Almost 3 weeks ago on 7 August, (NASDAQ:TSLA) Tesla’s CEO, Elon Musk, Tweeted from his care while driving to the airport, that he was planning to take the company private in what has become to be know as the ‘420’ buy out.
The market for the fledgling EV maker’s stock went nutZ.
Tesla shares spiked, the SEC investigated, and the Saudis said we like companies that make money, Tesla burns money.
Mr. Musk’s personal life came under scrutiny, and then he cried in an interview with the NY-T’s admitting his was addicted to an Rx drug named Ambien that he takes for sleeping, but that keeps him up for days at a time, hummm!
And now the ‘420’ going private notion has been abandoned .
Mr. Musk has said on his blog, and in private and the private that after due consideration, he has decided against the ‘420’ act and that Tesla will remain public.
The Big Q: What happened?
The Big A: Lots of negativity towards his ‘420’ Tweet, not the least of which was there is no money to pull off such a transaction.
Mr. Musk revealed a few things in his new statement about staying public that he probably should have considered more thoroughly before making the move in the 1st place.
His large, institutional investors, Morgan and Goldie educated him over the last few days about “compliance issues” that limit investments in private companies. Perhaps a failure of Due Diligence on the part of Mr. Musk before he announced his off the wall ‘420’ scheme.
The Wall Street advisors convinced Mr. Musk that the rate at which Tesla is burning money is unsustainable.
Mr. Musk still thinks there is investor out there for his asking writing on his blog, “my belief that there is more than enough funding to take Tesla private was reinforced during this process.”
My contact with The Street say, there is no money out there, either in debt or equity for him.
This wild ride has brought focus on M3 ‘production Hell’ issues and the company’s overall lack of profitability, Mr. Musk’s responsibility to the company’s investors to make a profit for them.
The spotlight is now an intense arc-light and Tesla’s next earnings report will be examined as closely as production numbers will be leading up to it.
It is not yet clear what long-term effect this will have on Mr. Musk’s tenure at the wheel of Tesla, or the company’s long-term viability,as some analysts very negative and many OEM suppliers are preparing for Tesla’s bankruptcy filing.
Mr. Musk ‘owns’ his Board, they are all either relatives or close friends.
We wait, and we will see what the future brings for this outlandish entrepreneur, and his cult EV company.
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