Tesla shares bleed as Musk abandons plan to take company private

Tesla (TSLA) shares in the Frankfort Stock Exchange saw a 5% dip as trading commenced on Monday following CEO Elon Musk’s U-turn on his plans to take the company private. The ripples of the sell-off were visible on Nasdaq Stock Exchange as well, where shares were trading down as much as 4.74% during the premarket hours.

Late on Friday, Musk had announced through a blog post that it is not possible to take the luxury electric car maker private as a majority of its shareholders were against the idea. The CEO had sent shockwaves three weeks back when he tweeted his intention of taking the company private at a share price of $420, adding that funding was secured.

The tweet had also invited an investigation by the US Securities and Exchange Commission and multiple lawsuits from investors.

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Tesla shares are currently trading down 10% from the levels seen before the tweet, and down 8% in the last six months.

Adding to the woes of the cash-strapped firm, Reuters had reported last week that the Saudi wealth firm, which Musk expected would help him take the company private, was also in talks with its potential competitor Lucid Motors for a $1 billion funding.

Tesla has been burnings cash to ramp up the production of its Model 3, which is necessary to achieve profitability in the second half of the year as promised. Though many analysts had predicted that it would require Tesla to raise more cash, CEO Musk had claimed that the company was well-off.

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