SAN FRANCISCO (Reuters) – Electric car manufacturer Tesla is finally listed on the stock market, says CEO Elon Musk, who gave up an idea that aroused skepticism from the financial community.
The electric car manufacturer Tesla will finally be listed on the stock market, announces its CEO Elon Musk, giving up an idea that has led to skepticism by the financial community. / Photo taken on August 2, 2018 / REUTERS / Brendan McDermid
The decision to leave Tesla on the stock market, announced Friday night, raises questions about the future. Tesla shares trade well below the August 7 level when Elon Musk on Twitter announced that it plans to remove Tesla from the list for $ 420 per share.
Tesla shares ended Friday at $ 322.82 on the Nasdaq.
Elon Musk and Tesla are also facing a series of lawsuits and an investigation by the Securities and Exchange Commission (SEC) into the accuracy of Musk's tweet that "guaranteed" funding for the proposed withdrawal.
Elon Musk said Friday that his conviction that there was more than enough money to write off the company had been strengthened while studying the case, but he dropped his idea because of comments from the shareholders and also because the execution of his idea was time-consuming used to be.
"Although the majority of the shareholders I spoke to said they would stay with Tesla if we would leave the stock market, the overall feeling was, in a nutshell," please do not do that. "" Elon Musk writes on his blog.
The billionaire, who owns about 20 percent of Tesla, estimated that two thirds of Tesla's shareholders would have opted for an option to "transfer" their shares to an unlisted company. This would have significantly reduced the amounts needed for the operation and avoided placing an extra burden on Tesla, with a debt of $ 11 billion and a negative cash flow.
But Elon Musk said on Friday that a number of institutional shareholders had explained to him that they were bound by the internal rules of their company that limit their ability to invest in an unlisted company.
This is in stark contrast to the August 7 tweet, in which Musk said: "Investor support is confirmed".
The largest shareholders of Tesla, T. Rowe Price Group, Fidelity Investments and Scottish Baillie Gifford refused to comment.
Six members of the Tesla board said in a separate statement that they were informed on Thursday by Elon Musk that he had given up his plan to withdraw the stock exchange. The board then resolved a special committee of three directors who had set it up to study the billionaire project.
"We fully support Elon, as the company will lead the future", says the board of directors.
However, some experts in the field of corporate governance have stated that the way in which Musk conducted its quotation project may lead the board to introduce a mechanism to secure it, for example by having a director Deputy General.
Some vendors say they are interested in Elon Musk's flirt.
"Personally, I'll see how the action opens Monday, and if it does not fall on this info quickly, I'll personally see this as an opportunity to strengthen my short position," said Christopher Irons, founder of quoththeravenresearch.com.
Jim Chanos of Kynikos Associates, who is also a short-seller on Tesla, said on Saturday: "The corporate governance disaster that Tesla is going through continues, remembering that Musk informed the board on Thursday, according to Friday Friday's announcement . "
Tesla will now have to prove that it can accelerate the production of its latest model 3, which is essential to achieve its profitability goals.
Musk has said several times since April that Tesla did not have to raise new capital and promised that the company would be profitable with positive cash flows in the third and fourth quarter.
However, analysts at Citigroup said this month that if a withdrawal from the stock market seemed less likely, "it would be wise if Tesla would at least try to bring together enough new equity as soon as possible" to create trust investors.
Alexandria Sage; Danielle Rouquié for French service