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Analysts say Tesla without its erratic CEO Elon Musk would be just another car company.
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Ceding control: As pressurised and potentially volatile as a publicly traded company’s fortunes can be, Musk realised there is just as big a risk from private companies buying large tranches of equity – especially with $24bn required to de-list. There was, for instance, a fear that interest from KSA’s sovereign wealth fund would lead to certain strings being pulled, such as location of auto manufacturing plants.
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Share ownership: During the consultation process with existing shareholders, it became clear that not every current investor would necessarily be able to retain their holding. This not only applied to smaller shareholders but also the likes of Baillie Gifford, BlackRock and Fidelity, whose stockholding was through funds that can only purchase publicly traded shares.
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Brand alignment: One issue that Musk seemed to grapple with the most was the notion of an electric car company being owned, or majorly backed, by either an existing manufacturer with a fleet powered by gas-guzzling engines, or a country so closely associated with fossil fuels. The symbolism for a company seeking to mass-market the Model 3 was simply too important.