SAN FRANCISCO • Tesla chief executive Elon Musk is no longer pursuing a US$72 billion (S$98 billion) deal to take his US electric carmaker private, abandoning an idea that had stunned investors and drawn regulatory scrutiny.

Last Friday's decision leaves Tesla as a publicly listed company but raises new questions about its future. The company's shares have been trading below their Aug 7 levels, when Mr Musk announced on Twitter that he was considering taking Tesla private for US$420 per share, as investors wondered what the long-shot bid meant for Mr Musk's ability to steer the company to profitability.

The decision also leaves Mr Musk and Tesla having to fend off a series of investor lawsuits and a United States Securities and Exchange Commission investigation into the factual accuracy of Mr Musk's earlier tweet that funding for the deal was "secured".

"Although the majority of shareholders I spoke to said they would remain with Tesla if we went private, the sentiment, in a nutshell, was 'please don't do this'," the Tesla chief executive wrote in a blog post last Friday.

Mr Musk, who owns about a fifth of Tesla, had said earlier this month that he envisioned taking the company private without using the standard method of a leveraged buyout, whereby all the other shareholders would cash out and the deal would be funded primarily with new debt.

Instead, two-thirds of shareholders, according to his estimate, would have chosen an option of "rolling" their stakes and continuing to be investors in a private company, rather than cashing out.

This would significantly reduce the amount of money needed for the privatisation deal and avoid further burdening Tesla, which has a debt pile of US$11 billion and negative cash flow.

But Mr Musk on Friday said some institutional shareholders had told him they have internal compliance issues that limit how much they can invest in a private firm. He added that there is no proven path for most retail investors to own shares were Tesla to go private.

REUTERS