A panel of nine jurors will hear opening arguments on Wednesday in a trial over Elon Musk’s tweets alleging he had “secured financing” to take Tesla private in 2018.
The class action was brought by investors who claimed Musk artificially inflated Tesla’s stock price when he tweeted in August 2018 that he was considering taking the electric car maker private at $420 per share and had financing in place for that. A deal never materialized. Shareholders say the posts ultimately caused them significant financial losses, as Tesla’s stock plummeted in response.
Musk said his posts, which sent Tesla’s stock price soaring to end the day up 11 percent, were based on conversations with backers from Saudi Arabia’s Public Investment Fund and what he considered a “handshake” of agreement to withdraw the company from the public markets.
Opening statements were expected to begin Tuesday, but U.S. District Judge Edward Chen in San Francisco acknowledged that jury selection took longer than expected as both sides in the case discussed the neutrality of prospective jurors.
Earlier in the case, Musk’s lawyers unsuccessfully sought to move the trial from California to Texas, where Tesla is now based, amid concerns that the jury pool in San Francisco would be tainted by the outcry over Musk’s recent Twitter reign. , which includes cutting its workforce of 7,500 people almost in half.
During the selection process, one prospective juror described Musk as “arrogant,” “unpredictable” and “irrational at times.” Another said: “I think he’s a bit out of style.” A nine-person jury was eventually selected, including seven men and two women.
The process is expected to last about 10 days.
In an earlier ruling, Chen said jurors should find Musk’s tweets reckless and false. Jurors will decide whether he knowingly and materially misled investors and, if so, whether the plaintiffs are owed damages.
The extensive list of potential witnesses includes Musk; members of Tesla’s board, its chief financial officer and head of investor relations; and Silicon Valley figures such as Silver Lake managing partner Egon Durban and Oracle co-founder and Musk confidant Larry Ellison.
Musk’s legal team is also seeking testimony from the head of Saudi Arabia’s sovereign wealth fund, Yasir al-Rumayan, and several other PIF figures to testify at the trial. PIF has filed a motion to block the request, arguing that the San Francisco court lacks jurisdiction to compel the Saudi executives to appear.
Earlier court documents showed how relations between Musk and al-Rumayan quickly soured over text messages when media reports of the private discussions began to circulate.
It is recommended
The “funding secured” tweet proved costly for Musk. He and Tesla each paid $20 million to settle a lawsuit from the US Securities and Exchange Commission. Musk also had to step down as chairman of the automaker, though he kept his CEO post.
The litigation comes amid a period of severe market turbulence for Tesla. The company’s share price has fallen 61.7% over the past 12 months as demand for its cars has softened. Some investors also believe that Musk’s recent purchase of Twitter has left the 51-year-old CEO very distracted.
Add Comment