By on August 25, 2018

Elon Musk + Tesla Model S Circa 2011

Fear not, there’ll be plenty of moaning about short sellers in the weeks and months — and probably years — to come. Late Friday, Tesla CEO Elon Musk pulled an about-face, issuing a blog post in which he claimed a couple of weeks of study revealed he shouldn’t take his publicly traded automaker private.

Apparently, the trip from “funding secured” to “the funding totally would have been there”* (not a direct quote) takes 17 days.

In the post, titled “Staying Public,” Musk outlines the process that followed his fateful August 7th tweet, in which he outlined why he believed the company should go private at $420 a share. A later New York Times interview revealed a sleep-deprived Musk issued the unapproved tweet from his car while driving to work. Sources claim the tweet “blindsided” board members.

After commenting on the loyalty of the company’s investors, Musk describes working with financial advisors from Silver Lake, Goldman Sachs and Morgan Stanley to gauge interest from investors in funding his plan. There’s no mention of the Saudi sovereign wealth fund, which Musk pointed to as a possible source of funds in a blog post released immediately after his Aug. 7 tweet.

Per Musk:

Based on all the discussions that have taken place over the last couple of weeks and a thorough consideration of what is best for the company, a few things are clear to me:

  • 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. Additionally, a number of institutional shareholders have explained that they have internal compliance issues that limit how much they can invest in a private company. There is also no proven path for most retail investors to own shares if we were private. 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.”

  • I knew the process of going private would be challenging, but it’s clear that it would be even more time-consuming and distracting than initially anticipated. This is a problem because we absolutely must stay focused on ramping Model 3 and becoming profitable. We will not achieve our mission of advancing sustainable energy unless we are also financially sustainable.

  • That said, my belief that there is more than enough funding to take Tesla private was reinforced during this process.

By issuing his intention to go private via tweet while remaining very vague about the source of the needed funding, Musk earned the wrath of shareholders and the scrutiny of the U.S. Securities and Exchange Commission. The SEC launched an investigation and reportedly issued a subpoena; several shareholders sued. As days passed without any new info on where these billions would come from, Tesla’s stock plunged.

On Friday, shortly before Musk’s blog post, CNBC ran a story stating the hiring of Morgan Stanley pretty much proved that the “funding secured” line was, at best, wishful thinking. Morgan Stanley is well-known for its “expertise for casting a wide net for financing,” CNBC noted.

It isn’t known how the SEC reacted to this latest development. In his post, Musk claims the automaker’s board backs him in this U-turn. The company’s environmental mission continues, Musk said, before closing the message with a word of thanks to investors, customers, and employees.

[Image: Tesla]

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50 Comments on “Musk Pulls a Smoking 180, Leaves Go-private Plan in Rear-view...”


  • avatar
    FreedMike

    I think Musk needs help.

    • 0 avatar
      tnk479

      Musk is lying about something. None of this makes any sense.

    • 0 avatar
      brn

      Assuming FM is serious, I agree. Elon needs a real vacation and some time with a counselor. He’s taxed himself too much.

      • 0 avatar
        Luke42

        I’ve discovered in my career that chronic stress makes me stupid.

        I suspect that Musk has been so stressed for so long that he’s being stupid, just like I was. I suspect he’s learning the same lesson I have.

        It’s taken me over a year to recover, too. Working for a bad boss can really hurt your health, and your career. Choose wisely, even if you work for yourself!

  • avatar
    Steve Biro

    The help Musk needs is A) More sleep and B) The realization that he must begin delegating more responsibility. Many on this site don’t like Musk and believe he is a charlatan. I am neutral on Musk and Tesla but believe he is honestly trying to build a real car company. He’s a brilliant guy and he’s not crazy. But no single person can do it all.

    • 0 avatar
      Lie2me

      Exactly, well said. Being a control freak isn’t as easy as it looks. That and a few months with Amber Heard could cause a meltdown in the strongest of men

    • 0 avatar
      Asdf

      Musk is NOT honestly trying to build a real car company. For that he would have had to develop and build real cars, which is something he has stubbornly REFUSED to do for a solid 15 years. Case in point: Every single Tesla ever built has a charging time of more than 5 minutes (it is usually a LOT longer), this even applies to Tesla vehicles built in 2018 (!!!). If Musk were serious about building a real car company, he would have addressed that defect in his vehicles BEFORE launching them on the market. The fact that he still hasn’t even after all these years, says it all. Tesla deserves to go bankrupt – and it will.

      • 0 avatar
        Vulpine

        Ok, Asdf. Show us how to do it. Nobody else, and I mean NOBODY else has managed a full charge on a 50kWh battery in less than 30 minutes. Show us how it can be done.

        • 0 avatar
          Asdf

          Tesla is indeed not the only automaker that has jumped the gun by prematurely releasing EVs that are not fit for use. However, Tesla is the ONLY automaker of relevance exclusively specializing in BEVs, so expectations should necessarily be higher, and certainly with regards to it taking care of basic things (like ensuring that fully charging a battery doesn’t take longer than filling a fuel tank) during the development phase, i.e. BEFORE its vehicles are launched on the market.

          • 0 avatar
            Vulpine

            In other words, Asdf, you can’t do it. Yet you hold a relatively start-up company to a standard that is physically impossible… for now.

            Tesla has proven that a BEV can be and IS a viable means of transportation. Yes, it has its limitations, just like any other car. Those limitations are just different, that’s all. By no means should expectations be higher; no vehicle is perfect for all purposes, though some may be better than others in different tasks. Every vehicle is a compromise, which is why there is such a broad variety of vehicles available in the world.

        • 0 avatar
          EBFlex

          “Nobody else, and I mean NOBODY else has managed a full charge on a 50kWh battery in less than 30 minutes.”

          What relevance does that have when you have a bumper that falls off in the rain or quality control that is so bad, door panels are mismatched?

          And trust me, if Muskrat can charge a battery, anyone can charge a battery. Nothing he does is groundbreaking.

          • 0 avatar
            mcs

            Well, there are some interesting aspects of Tesla quality emerging. Sure, they’ve got a few things to straighten out, but at the core, the cars are pretty damned good. Panel alignments can be fixed and bumpers more securely attached etc. That stuff is relatively minor.

            Check out the links I’ve attached. It would also be interesting to compare the numbers here against an S class or 7 series. Full maintenance records and this isn’t a magazine or propaganda web site. An actual customer. In addition to these links, check out the tear-down articles on the Model 3.

            https://www.tesloop.com/blog/2018/7/16/tesloops-tesla-model-s-surpasses-400000-miles-643737-kilometers

            https://www.tesloop.com/blog/2018/8/2/model-x-90d-300000-miles-in-two-years

          • 0 avatar
            mcs

            And to be totally honest, I’m delaying my Taycan order because I’m afraid of what early Porsche quality and drivetrain quality might be. Porsche. Remember the IMS issue? I do.

          • 0 avatar
            EBFlex

            “Sure, they’ve got a few things to straighten out, but at the core, the cars are pretty damned good.”

            80% of Model 3s need to be fixed before they leave the factory.

            But lets continue this falsehood that Tesla quality is good. The fact is, it’s worse than any other automobile manufacturer on the planet today.

      • 0 avatar
        mcs

        @asdf: You don’t understand how EV charging works. For my next cars, I’m going to get a car with at least 300 – 325+ EPA range. Because I’m good with regen etc. I’m typically seeing ranges closer to European NEDC rates, so my range will be even higher. Because the furthest I will usually drive is about 150 miles and at most 200, I’m going have enough range that I only need to charge overnight.

        Even now, most of my charging is overnight. Unless I’m making a long trip, I don’t even pay attention the range gage or how much charge I have. I just plug in at home and the car is always good to go.

        When I do public charge, I’m not standing next to the car pumping in electrons. I’m checking email, eating, and shopping. Especially shopping is kind of funny because the car is fully charged by the time I return to it.

        The other thing about the longer trips is that charging is usually for extra padding. The car could make the 100-mile trips without public charging. I don’t like to take chances, so I charge at the halfway point. That means I’m only pumping in 50 miles worth and is no where near the times stated for a full charge.

        Quick charging speeds are about to get a bump because of improvements in battery technology and more powerful chargers. The Taycan can dump in 250 miles worth of juice in 15 minutes. Rumor has it that the Model 3 may already support Teslas new faster chargers. Given the fact that public charging isn’t a common occurance for many EV owners, a few minutes of extra time isn’t a big deal. To be honest, most of us use that charging time to check emails and 5 minutes is not nearly enough time to check emails.

  • avatar
    Vulpine

    If you ask me, the article is more than prejudicial–especially the headline–on a well-reasoned statement by Musk. I will admit that I am prejudiced myself but I also make it clear in my statements where my prejudice lies. This article implies that TTAC is NOT neutral in its reporting of the automotive industry.

    • 0 avatar
      EBFlex

      Please elaborate how this article is unfair to the fraud or his circus tent company.

      • 0 avatar
        Vulpine

        In the same way that you call it one, EBF. Unless you can prove those allegations, your arguments are pure prejudice.

        • 0 avatar
          EBFlex

          Have you seen what Muskrat has done?

          Tweeting out nonsense for the sheer purpose of stock manipulation = fraud.

          As for the circus tent company….have you seen the abhorrent quality of the model 3? Mismatched door panels, bumpers that fall off in the rain over 4,000 of the 5,000 cars made during that week that they hit 5K need to have rework done.

          There isn’t another car company on the planet that has such horrid quality control processes in place. Hell anything built in China right now has probably been through a more rigorous quality control process than any Tesla.

          And don’t get me started on beta level vehicle guidance software or the inability for a Tesla to see fire trucks sitting in a traffic lane.

          Muskrat and Tesla are a laughing stock.

          • 0 avatar
            Vulpine

            That’s not proof, EBF, that’s allegation… opinion. Where’s the proof?

          • 0 avatar
            EBFlex

            All of that was fact.

            And most of that has happened within the past couple months. Do you even read the news about Tesla?

          • 0 avatar
            Vulpine

            Fact: Musk tweeted
            Not Fact: ‘for the purpose of stock manipulation.’

            Fact: The 5K week of Model 3s was rushed
            Not Fact: The overall quality of Tesla cars is abhorrent.

            Not fact: There isn’t another car company on the planet that has such horrid quality control processes.
            Fact: There are numerous car companies on the planet with far worse quality control. Some have none at all.

            That’s all I have to say to you, EBF. Good-bye.

          • 0 avatar
            EBFlex

            “Fact: Musk tweeted
            Not Fact: ‘for the purpose of stock manipulation.’

            Fact: The 5K week of Model 3s was rushed
            Not Fact: The overall quality of Tesla cars is abhorrent.

            Not fact: There isn’t another car company on the planet that has such horrid quality control processes.
            Fact: There are numerous car companies on the planet with far worse quality control. Some have none at all.

            That’s all I have to say to you, EBF. Good-bye.”

            Point 1: Why else would he tweet that? That’s like saying “I shot that person in the head…but it wasn’t to kill them.” Well why else would you shoot someone in the head?

            Point 2: 80% of Model 3 need to be fixed immediately after they are made. That’s not abhorrent quality?

            Point 3: No other car company on the planet needs to fix 80% of their cars immediately after they are made. Tesla is the only one that gets that trophy.

            I’m sorry that my facts bother you, but they are clear. Stop drinking the Kool Aid from this fraud and open your eyes.

    • 0 avatar
      civicjohn

      @vulpine, I don’t believe that EM’s “well-rounded statement” just rolled off his tongue. Maybe after a gaggle of lawyers took a first look.

      Is it 420 at your house?

      • 0 avatar
        Vulpine

        I suggest you learn how to quote someone. I did not say, “well-rounded statement.”

        • 0 avatar
          civicjohn

          @vulpine,

          My bad, I tried to fix it OTA but TTAC doesn’t support it.

          Reasoned, rounded, whatever. Over at Electrek everyone is placing their orders for the pickup truck. I hope nobody takes his phone away, the fun never stops!

          • 0 avatar
            Vulpine

            My problem is that he’s a year too late for the truck. Because it wasn’t planned to come out until ’22, I ordered a new truck just this past week. Not an electric or a hybrid.

            I do believe the electric pickup can do better than the naysayers want to admit and I also believe that it could be done as easily as Jag is electrifying the XK-E.

  • avatar
    indi500fan

    This is better than any reality show.
    Musk should sell the rights to somebody like Bunim/Murray and have a daily episode on E! Network or Bravo.

    Throw in Grimes and Azealia Banks, you got all the ingredients for a huge viewership.

    Does Musk go to Burning Man? Can’t be too far away from the Gigafactory in Sparks, right?

  • avatar
    EBFlex

    So the fraud tweeted it out just to manipulate the stock.

    Lock him up

    • 0 avatar
      JohnTaurus

      Yeah! As per this part of the article:

      ” The SEC launched an investigation and reportedly issued a subpoena; several shareholders sued. As days passed without any new info on where these billions would come from, Tesla’s stock plunged.”

      So, you’re saying he wanted the company stock to “plunge”? Please elaborate on how this would be of any sort of benefit.

      You obviously love trolling Tesla and Ford, but you should probably have at least some sort of vague idea of what you’re talking about.

      • 0 avatar
        anomaly149

        The SEC is probably looking for various options strategies and other trades. There are a lot of ways to make money on the stock market beyond buying a base stock and sitting on it for 40 years like Warren Buffet. And it’s not just shorting, there are strategies involving options and futures that can make you money within or outside certain value ranges. There are strategies that can make you a finite amount of money regardless of what the market does. Since a lot of Musk’s wealth is tied up in direct stock holdings in Tesla and SpaceX, most of it isn’t really liquid. It would lose tremendous value if he just started mass offloading Tesla stock, so it would make sense for him to be employing various other methods to make money.

        And on top of that, Musk has been very vocal about hating short-sellers. Direct market manipulation to harm another player is illegal even if it doesn’t directly benefit you.

        The SEC is gonna have a field day.

      • 0 avatar
        Ermel

        Maybe he did the short-selling himself. ;-)

      • 0 avatar
        EBFlex

        What are you talking about Johnny boy

  • avatar
    stingray65

    Was Elon on drugs during both announcements or just the first one?

    Is part of the hassle in going private the fact that no one with $70B wants anything to do with money losing Tesla, especially now that they are also under SEC investigation and facing a multitude of lawsuits by short sellers?

  • avatar
    Manic

    Well, John, if you’d look at stock price graph, you’d see that price went heavily up right after tweet and went back down only after people waited, analysed a bit und it became clear after silence from EM that his claim about secured funding was probably a lie (and thus manipulation).

    • 0 avatar
      HotPotato

      Did he PROFIT from it? Because if not, then I wouldn’t call it manipulation. More like yet more proof that nobody should Ambien-and-tweet.

      • 0 avatar
        FOG

        @HotPotato, it isn’t a matter of what you call it. The law is very clear. Did he intend to commit stock manipulation? Who knows with EM. He doesn’t have to benefit from breaking a law to be prosecuted for it.

    • 0 avatar
      EBFlex

      “Well, John, if you’d look at stock price graph, you’d see that price went heavily up right after tweet”

      Don’t confuse Johnny Boy with facts. He despises facts as they make him extremely uncomfortable.

  • avatar
    sgeffe

    Mmmmmm..popcorn!

  • avatar
    dontbestupidyoumoron

    Musk ought set his sights lower. How about producing something that doesn’t require massive taxpayer subsidies in order to be brought to market?

  • avatar
    DeadWeight

    I hereby declare that the Tesla Deathwatch can now commence as of 10:18 pm Eastern Standard Time, August 26, 2018.

  • avatar
    redapple

    Musk is one of those guys that CONSTANTLY has to be in the news. Add in::
    -Over worked.
    -Out of his depth in Car Building. (as anyone knows who has spent years on the plant floor with real production related DELIVERABLES). It’s really difficult.
    -Lack of sleep.
    -Ambien?

    End result?> Silliness. IGNORE HIM.

    • 0 avatar
      TimK

      The public only company with a CEO nuttier and more erratic than Musk is Sears Holdings. Last I heard, their share price was on a tear too. ;-)

      • 0 avatar
        redapple

        TIM

        The Sears guy is smart. He is raping the company. Decapital izing it and putting the proceeds in his pocket.

        Opposite of muck. Who is burning hundreds of millions/year.

        There was a very interesting story on this in Vanity Fair a couple months back.

  • avatar
    FOG

    Elon’s blog post is a plea to avoid jail time and the loss of his company. His tweet is equivalent to a offer to buy stock at 420 that was trading at 360 at the time. This is illegal. The fact that Elon was ignorant of these SEC regulations should not prevent him from prosecution. That being said there is not much to be gained by spending tax dollars on this as long as they can reign him in. It would be nice if they could force him out of control and put a real business mind in place.

    • 0 avatar
      Vulpine

      … an allegation that is not verified and therefore not necessarily true. Such statements can be considered libel because it directly accuses the CEO of a crime without any evidence to support that claim.

      • 0 avatar
        FOG

        @Vulpine, you really don’t understand much about stock laws. You might consider reading about “churning”, “whirling”, and the responsibility put on employees of publicly traded stocks. It is a fact that he tweeted that he planned to buy stock at 420. The stock was trading at 360 at that same time. The tweet violated SEC regulation. None of these are allegations.

        • 0 avatar
          Vulpine

          Let’s see what the SEC actually concludes before we call him ‘guilty’, hmmm? Because if the SEC does not agree with you, then your allegation is patently false.

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