Tesla To Stay Public
SCOTT SIMON, HOST:
Never mind - Tesla plans to remain a public company after all. Earlier this month, the CEO, Elon Musk, tweeted he had funding lined up to take the company private. It shocked many investors and set off a firestorm of criticism. But late last night, Mr. Musk said that won't happen. Tesla will not go private. We're joined now by Uri Berliner of the NPR business desk. Uri, thanks for being with us.
URI BERLINER, BYLINE: Hey, Scott.
SIMON: Any idea why Mr. Musk has changed his mind?
BERLINER: Well, he did put out a statement on Tesla's Twitter feed last night, and he said 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, not a private one. And then he went on to say that there were obstacles that would prevent lots of investors from swapping their shares into a private company. And he said taking the company private would be really time consuming, and the company needs to focus on making money, becoming profitable and increasing production of the Model 3, its first mass-market car. And, you know, I should note that this came from Tesla's official Twitter feed, not Musk's personal account, that personal account from which he sent so many colorful and controversial tweets.
SIMON: Didn't Elon Musk know all this before he sent out that memorable tweet on August 7?
BERLINER: Well, a lot of people think he should have. Let's go back to that August 7 when he sent out that tweet and said I'm considering taking the company private, funding secured at $420 a share. And analysts immediately were very dubious that Musk could pull this off. Where would he get the 10 billions of dollars to take the company private? Did he really have the funding secured as he claimed? And that is something that the Securities and Exchange Commission is investigating, according to multiple reports. And Musk said at the time - or Musk said that two-thirds of the investors would stick with Tesla if it went private, but he really had no way of knowing that.
SIMON: And why did he want to take the company private in any case?
BERLINER: Well, he's always chafed at the demands of Wall Street - the quarterly earnings reports, the pesky questions from analysts. He famously called one analyst's question boring and boneheaded on an earnings call earlier this year. But perhaps even more than all this, Musk...
SIMON: I mean, he's not a collegial guy.
BERLINER: No, he's not. He's a very outspoken guy, and people love him, but also he can get very testy. Perhaps even more than all this, Musk has really been at war with short sellers. These are the people, the investors, who bet that the Tesla shares will go down, bet against his company. So he got - saw going private as a way of bypassing the short sellers. You know, ironically, Musk's theatrics over the past several weeks - the tweets, a statement in which he said, well, I can get the funding, not necessarily I have it locked up and then this rambling interview with The New York Times when he talked about how excruciating running the company has been - this seems to play into the hands of the short sellers. Musk set his target price for going private at $420 a share. Right now, the stock is worth a lot less than that. It's about $322 a share.
SIMON: Where do you see Tesla going from here?
BERLINER: Well, first, I should say Tesla has a lot of things going for it. It has a cult following, people who love their cars. They've gotten fantastic reviews. Musk is also selling something bigger than cars. He's this evangelist for a cleaner future, a greener future with fewer carbon emissions, and a lot of people are very attracted to that. All that said, Tesla has got a lot of problems. It's losing money. It's consistently behind schedule on production of that make-or-break car, the mass-market Model 3. And now there are a lot of questions about whether - about Elon Musk's temperament, whether he's really suited to run the company.
SIMON: NPR's Uri Berliner, thanks so much.
BERLINER: You're welcome. Transcript provided by NPR, Copyright NPR.