Tesla Inc Chief Executive Elon Musk said late on Friday he would no longer pursue a $72 billion deal to take the luxury electric car maker private, abandoning an idea that stunned investors and drew regulatory scrutiny.
Musk had announced on Twitter that he was considering taking Tesla private for $420 per share, as investors wondered what this meant for Musk's ability to steer the company to profitability.
"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," Musk said.
Musk and Tesla also face a series of investor lawsuits and a U.S. Securities and Exchange Commission investigation into the factual accuracy of Musk's tweet that funding for the deal was "secured."
Six members of Tesla's board of directors said in a separate statement that they were informed on Thursday by Musk that he was abandoning his take-private bid. The board then disbanded a special committee of three directors it had set up to evaluate any offer that Musk submitted.
"We fully support Elon as he continues to lead the company moving forward," the board said.
One of Tesla's biggest challenges is ramping up production of its latest vehicle, the Model 3, which is critical to its profitability goals.