Tesla shares slip after company decides to stay public

Tesla shares slip after company decides to stay public

Tesla shares slip after company decides to stay public

Some analysts said the drama has damaged the credibility of both Musk and his board, and called for the company to bring in a top operations executive to help right the ship.

But shareholders said Musk knew Tesla was "woefully unprepared" to meet its production goal of 5,000 Model 3s per week, and that Tesla's share price was inflated until after the company finally cut its production target last November.

Musk stunned markets earlier this month by announcing the plan to go private in a tweet and boasting that funding had already been secured. "They will be asking questions of him and others involved in the decision as to why he reversed course".

Investors in Tesla's bonds and convertible debt also had shown skepticism that the buyout would materialize during the days after that tweet, and a subsequent blog post in which Musk made a case for going private. In addition to its interest in Tesla, the Saudi sovereign wealth fund is considering an investment in aspiring USA electric-car maker, Lucid Motors Inc., one of the people said.

Tesla investors are likely to suffer a lengthy hangover from Elon Musk's aborted offer to take the company private, Wall Street has warned.

Musk had hired advisers including Goldman Sachs Group Inc. and Silver Lake as well as Morgan Stanley.

Yet no decisions had been made on how to advance as the advisers were still trying to understand the funding situation and whether taking the company private was even plausible, the people said. It finally became clear, by Musk's own admission, that it was not. The company has said it expects to make 50,000 to 55,000 Model 3s in the quarter, which averages to roughly 4,200 vehicles a week at the higher end of the guidance.

Lawsuits against Mr Musk, co-founder and chief executive of Tesla, "could linger for a year", Gene Munster, managing partner at Loup Ventures, a venture capital firm, said. "This is not a situation where we can just forget about it". Coffee noted that the SEC may feel as though these disclosures were deficient. "And now Tesla needs to get back to basics, which is ramping Model 3 production and profitability". People close to Musk have said that he might have been "overly simplistic" in his thinking, the New York Times suggests.

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