Not just the tough takeover of Twitter prepares the US entrepreneur Elon Musk (51) a lot of trouble these days. Musk himself is facing charges in a California court over ignorant tweets from 2018. In a fraud case for misleading tweets about the electric car manufacturer Tesla in 2018, a plaintiff’s attorney accused the tech billionaire of lying. “Elon Musk, Tesla’s chairman and chief executive officer, lied,” attorney Nicholas Porritt said Wednesday in a federal court in San Francisco. “Because of his lies, ordinary people have lost … millions and millions of dollars.”
In August 2018, Musk announced via Twitter that he wanted to take Tesla private for a price of $420 per share. Funding for this is “secured”. The announcement caused Tesla shares to fluctuate, but Musk later backed down. It became clear that the financing was anything but secure.
Investors subsequently sued Musk. They accuse the second richest person in the world of “artificially manipulating” the price of Tesla shares with the aim of harming all investors who had bet on a falling share price.
A central role in the class action lawsuit is played by the State Investment Fund of Saudi Arabia, which was supposed to be a key donor to the plan. Musk’s side claims that a senior manager of the fund has offered extensive funding in conversations. The plaintiffs’ lawyers point out that there were no agreements on this.
Trading in Tesla shares was even suspended at the time
Plaintiff attorney Porritt said in his opening statement in court that Musk’s price of $420 (today around 388 euros) was a “joke”. The funding also never existed.
Musk’s tweet caused considerable irritation around August 2018. The technology exchange Nasdaq, on which Tesla’s shares are traded, temporarily stopped trading in Tesla shares in view of the excitement surrounding Musk’s tweets. After the tweet, the stock rose more than seven percent to $367 at the time.
Musk’s attorney, Alex Spiro, said the Tesla CEO’s tweets may have been “imprudent,” but “not cheating, not even close.” At the time, Musk felt pressured by media reports to tweet quickly. “What Mr. Musk was communicating in those tweets was that Mr. Musk was serious about delisting Tesla,” Spiro said.
The civil trial is scheduled for three weeks. Musk himself is also expected to testify. The founder of the software giant Oracle, Larry Ellison, who is a friend of Musk, is also said to have made statements.
The tweets about Tesla also got Musk into trouble with the US Securities and Exchange Commission. As part of an agreement, Musk had to give up the chairmanship of the Tesla board of directors, pay a fine of $20 million and have tweets about Tesla approved by a lawyer.
Recently, the Tesla share lost massively in value. Since January 2022, the stock has lost almost 60 percent of its value. Musk’s fortune alone, who bought Twitter for around $44 billion at the end of October, is said to have shrunk by around $200 billion since the end of 2021.