• Tesla announced it’s staying public. We were wrong in thinking there was a 2/3 chance that Tesla goes private. 
• We continue to believe Tesla would create more value as a private company. That said we believe shares of TSLA are undervalued given the company’s position in EVs, autonomy, and renewable energy.
• The company cited three primary reasons for staying public: current TSLA investors’ limits on private investment, no path for retail investors to invest, and the process would be a distraction from ramping Model 3 production.
• A fourth unstated reason may have been collateral damage from the recent media interactions of Musk and a perception from potential go private investors that he may be difficult to work with. We still think there is work for Musk to do to rebuild that trust in the market.
• There is a silver lining, as Musk pointed out in the blog post, that this will allow him to fully focus on Model 3 production as he should be able to hand off most of the work related to the class action issues to his legal team.
• These reasons will put further scrutiny on Musk’s August 7th “funding secured” comment.
• We expect class action lawsuits against Musk around “funding secured” could linger for a year.
• We expect Musk to continue to lead Tesla regardless of any outcome from the class action lawsuits.
• We don’t know what level of personal liability Musk will be exposed to related to “funding secured” but note while the comment may seem clear (i.e. I have all of the money to take Tesla private), it is open to legal interpretation.
• We believe Tesla will be insulated from any claims given the company has made it clear that “go private” is an Elon Musk initiative.
• We expect a small fine from NASDAQ related to the failure to notify the exchange of pending material news from the August 7th go private tweets.

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