Elon Musk, Tesla Inc’s chief executive, told jurors on Friday that investors don’t always respond to his Twitter messages as he expects, during a lawsuit over his interest in taking the electric car maker private in 2018. cars, which shareholders say has cost them millions in lost trading.
Musk’s testimony began with questions about his use of Twitter, the social media platform he bought in October. He called it the most democratic way to communicate, but said his tweets didn’t always affect Tesla stock the way he expected.
“Just because I tweet something doesn’t mean people believe it or will act on it,” Musk told jurors in federal court in San Francisco.
Musk testified for less than 30 minutes before the court adjourned until Monday, and he was not asked about a 2018 Twitter post in which he said he was considering taking Tesla private and had “funding secured” .
I’m considering getting a Tesla private for $420. Financing secured.
—@elonmusk
He is expected to discuss why he insisted on having the backing of a Saudi investor to take Tesla private, which never happened, and whether he knowingly made a materially misleading statement with his tweet.
The case is a rare securities class action, and the plaintiffs have already overcome major legal hurdles, with US Judge Edward Chen ruling last year that Musk’s publication was false and reckless.
Shareholders say Musk lied when he sent the tweet, costing investors.
WATCH | What are the impacts of Musk’s reign on Twitter:
Is Elon Musk Ruining Twitter?
December 1, 2022 | Ever since Elon Musk took over Twitter, many users say the app has descended into chaos. Andrew Chang spoke with Globe and Mail tech reporter Josh O’Kane to reveal the impact of Musk’s reign and what the company’s future might look like—all while playing an intense game of Jenga.
A company facing difficulties
Musk, dressed in a dark suit over a white button-down shirt, spoke softly and at times in a puzzled manner, in contrast to his occasionally combative testimony during past trials.
Musk described the struggles Tesla was going through at the time he tweeted about “secured financing,” including bets from short sellers that the stock would fall.
“A bunch of Wall Street sharks wanted Tesla dead, very badly,” he said, describing the short sellers who profit when the stock price falls.
He said short sellers were spreading false stories and said the practice should be outlawed.
Tesla shares ended the day Friday at $133.42, up about five percent from the previous day.
Documents related to the class-action lawsuit on behalf of investors who owned Tesla stock in August 2018 were filed in federal court in San Francisco on Tuesday, January 17. (Jeff Chiu/Associated Press)
Earlier Friday, Tesla investor Timothy Fries told jurors he lost $5,000 buying Tesla stock after Musk sent the tweet at the center of the lawsuit.
Fries said that “secured funding” means to him that “there has been some scrutiny, some critical review of those funding sources.”
Musk wanted to protect shareholders, lawyer says
Musk’s lawyer, Alex Spiro, told jurors in his opening statement Wednesday that Musk believed he had financing from Saudi backers and was taking steps to make the deal happen.
Fearing a media leak, Musk tried to protect the “common shareholder” by sending out the tweet, which contained “technical inaccuracies,” Spiro said.
Guhan Subramanian, a Harvard law professor, told the jury that Musk’s behavior in 2018 was “unprecedented” and “inconsistent” in structuring a corporate deal because he went public with his intention to take Tesla private without proper financial or legal analysis.
A nine-member jury will decide whether the tweet artificially inflated Tesla’s stock price by boosting the financing status for the deal, and if so, by how much.
The defendants include current and former Tesla executives, who Spiro said had “pure” motives in their response to Musk’s plan.
LISTEN | Where things went for Tesla stock value:
Front Burner25:36 Tesla shares fall. that’s why
Not long ago, Tesla seemed unstoppable. But Elon Musk’s electric vehicle giant ended 2022 as the worst-performing stock among the most valuable tech companies — and its stock has since fallen even lower. Today, Patrick George—a contributing writer at Vox Media’s The Verge and an editor at The Autopian—joins us to look at where things went south for Tesla and the obstacles the company faces going forward.
Add Comment