Opening statement begins during Tesla shareholder Elon Musk’s tweet trial
Documents related to Tesla Investors’ class action lawsuits are loaded onto trolleys outside federal court in San Francisco. (AP)
SAN FRANCISCO – Opening statements begin Wednesday in a trial that will determine whether the Tesla CEO can Elon Musk deceived investors by asserting in 2018 tweets that he was financially prepared to take the electric carmaker private.
A nine-person jury that sat on Tuesday for the case is expected to include testimony from Musk to explain his thoughts on participating in one of his favorite activities. – tweets on Twitter. The Twitter service he currently owns.
Musk’s tweets that spurred the company’s stock price spike ended a week later after it became clear that he didn’t have enough money to buy it back after all. Investors then sued him, saying Tesla stock would not have appreciated in value as much had he not given the prospect of buying the company at $420 a share.
Musk’s tweet also attracted the attention of securities regulators, who concluded that it was inappropriate and that he was lying. in a settlementthey forced him to pay $40 million and asked him to resign as Tesla chairman.
He has since argued that he entered the settlement under duress and asserts that he believes he has blocked financial support for the acquisition in meetings with representatives from the Investment Fund. public private sector of Saudi Arabia.
Even while making big changes at Twitter, Musk continues to hold the position of CEO at Tesla and derives most of his fortune and reputation from the company.
The trial revolves around a August 7, 2018, tweet in which Musk claimed that he had lined up finance to pay for a $72 billion Tesla acquisition, which he then amplified with a follow-up statement that makes a deal seem imminent.
But the acquisition never materialized, and Musk will now have to explain his actions by oath before federal court in San Francisco. The class action lawsuit was filed on behalf of investors who owned Tesla stock over a 10-day period in August 2018.
The outcome of the trial could lead to a jury’s interpretation of Musk’s motives for the tweets, something US District Judge Edward Chen had. decision is wrong.
The judge dealt Musk another setback on Friday, when he rejected Musk’s bid to transfer the trial to federal court in Texas, where Tesla is moving its headquarters in 2021. Musk has argued that negative coverage of his purchases on Twitter poisoned the jury group in the San Francisco Bay Area.
The challenge of finding jurors who don’t have strong feelings about Musk became apparent during Tuesday’s tough selection process.
At one point, the judge flagged several potential jurors who had expressed extreme suspicion or enthusiasm about Musk during pre-trial questions. The seven jurors were questioned individually, away from the rest of the jury group, to reduce their ability to influence the opinions of others in the courtroom.
Chen and attorneys for both shareholders and Musk eventually ended up grilling seven of those jurors, who variously described Musk as “arrogant,” “narcissistic.” , “unpredictable”, “a little out of the ordinary”, “mercenary” and “a genius”. .”
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 with the automaker at a time of intense competition.
Those concerns contributed to Tesla’s shares falling 65% last year, resulting in the loss of more than $700 billion in shareholder wealth – far more than the $14 billion fortune swing occurred. between the company’s high and low share prices from August 7 to August 17, 2018, the period mentioned in the lawsuit.
Tesla’s stock has split twice since, making that $420 price worth $28 on an adjusted basis today. Shares closed last week at $122.40, down from the company’s November 2021 split-adjusted high of $414.50.
After Musk abandoned his intention to buy Tesla, the company fixed a production problem, leading to a rapid increase in auto sales that sent the company’s stock soaring and made Musk the richest person in the world for the time being. until he bought Twitter. Musk dropped from the top of the rich list after a stock market backlash for his handling of Twitter.
The trial is likely to provide insight into Musk’s management style, as the witness list includes several current and former top Tesla executives and board members, including including such celebrities as Oracle co-founder Larry Ellison and James Murdoch, son of media mogul Rupert Murdoch.
The film may shed light on Musk’s relationship with his brother Kimbal, who is also on the list of potential witnesses. The trial is expected to last until early February.