The tweets lead to a settle 40 million dollars with stock managers. It also led to a class action lawsuit accusing him of misleading investors, dragging him to court on Friday.
The nimble billionaire stood before a witness in a dark suit on the third day of the civil trial in San Francisco that his attorney unsuccessfully tried to move to Texaswhere Tesla is currently headquartered, on the premise that media coverage of his chaotic takeover of Twitter contaminated the jury.
A nine-person jury assembled earlier this week will be responsible for deciding whether a pair of tweets Musk posted on August 7, 2018 caused damage to Tesla shareholders over a period of time. 10 days resulted in Musk admitting that the acquisition he envisioned was incorrect. will not happen.
A month later, Musk stepped down as Tesla chairman while remaining as CEO under a Securities and Exchange Commission agreement without admitting any wrongdoing. He has resisted the agency since then, saying at a Ted Talk last year that the pressure to settle the case was like having a gun to his “baby” head.
In the first two tweets of 2018, Musk stated “funding guarantee” for a $72 billion Tesla acquisition at a time when the electric carmaker is still grappling with production problems and is worth much less than it is today. Musk followed up a few hours later with another tweet suggests an impending deal.
On Friday, Musk — who last year bought Twitter for $44 billion — downplayed the impact his tweets had on the company’s stock price.
“It’s hard to say that the stock price has anything to do with the tweet,” he told the jury. “Just because I tweet about something doesn’t mean people believe it or will act accordingly.”
He said tweeting was the “most democratic way” to communicate with investors.
“I am very interested in retail investors,” he said during the interview with shareholder attorney Nicholas Porritt.
But he acknowledged that investors can get more details in traditional company filings filed with securities regulators, with character limits set on Twitter.
“I think you can be completely honest” on Twitter, Musk said. “But can you be comprehensive? Of course not.”
Even before Musk took a stand, U.S. District Judge Edward Chen stated that jurors could consider those two tweets untrue, allowing them to decide whether Musk was intentionally misleading. investors and whether his statements cause them to incur losses.
Musk has previously argued that he entered into the SEC settlement under duress and asserted that he believes he locked away financial support for the Tesla acquisition during meetings with representatives. from the Public Investment Fund of Saudi Arabia.
The jurors heard from two investors claiming they lost money betting on Tesla from Musk’s now infamous tweet on August 7, 2018 and a Harvard University professor who did testify as an expert witness that Musk’s hasty proposal does not confirm tradition. practices in management acquisition.
Testing for his Tesla tweets comes at a time when he is focusing on Twitter, which he bought in October after trying to retract that purchase.
Musk’s Twitter leadership – where he has gutted staff and alienate users and Advertisers — has proven unpopular with existing Tesla shareholders, who worry that he has spent less time running the automaker at a time of fierce competition. Those concerns contributed to a 65% plunge in Tesla’s stock last year, wiping out more than $700 billion in shareholder wealth — far more than the $14 billion fortune swing that occurred. between the high and low share prices of the company for the August 7 to 17 period, the 2018 period covered in the class action.
Tesla’s stock has split twice since, making the $420 buyback price quoted in his 2018 tweet worth $28 on a current adjusted basis. The company’s shares traded around $133 on Friday, down from the company’s November 2021 split-adjusted high of $414.50.
After Musk abandoned his intention to buy Tesla, the company fixed production problems, leading to a rapid increase in auto sales that sent the company’s shares soaring and made Musk the richest person in the world. until he bought Twitter. Musk dropped from the top of the rich list after stock marketbacklash for his handling of Twitter.
Musk’s lawyers told the jury in opening statements that although his tweets were hasty and technical, they accurately conveyed that he was sincere about going private. chemical Tesla. Musk thinks the short-term plan to take Tesla private is solid based on his discussions with Saudi Arabia’s sovereign wealth fund.
The trial comes as Musk’s fortune has steadily declined from as high as $340 billion USD in November 2021. He became the first person in history to lose more than 200 billion USD, while spending 44 billion USD to acquire Twitter Inc. Last month, he was dethroned as the world’s richest man, and Tesla’s stock has plummeted 33% since December. .1, with the electric-car maker facing increasing competition and economic recession is looming.
Musk is no stranger to courtroom battles, and has been nicknamed “Teflon Elon” for his ability to escape unscathed. He stood his ground and prevailed in the 2019 Los Angeles trials and in 2021 in Delaware. He also testified in November in a Delaware investor lawsuit over his $55 billion Tesla payment package — but that has yet to be decided.
Includes material from Bloomberg News