In the fraud case against Elon Musk (51) for misleading tweets about the electric car manufacturer Tesla the head of the company has dismissed all allegations against him as “scandalous”. Musk assured the court in San Francisco on Monday that he “never” wanted to deceive investors. With his controversial tweets, he expressed his personal beliefs at the time – and didn’t want to cheat anyone.
Musk was on the short message service in August 2018 Twitter announced plans to take Tesla private at a price of $420 per share. Funding for this is “secured”. The announcement caused strong price fluctuations Tesla stock
, but Musk later backed down. It became clear that the financing was anything but secured. Investors then sued Musk.
Judge Edward Chen ruled last year that the claims made in Musk’s tweets in early August 2018 were false. The jury will now decide whether Musk knowingly made false statements, whether they were relevant to the decisions of the plaintiff investors and whether they actually cost money. A defeat in the process can be expensive for Musk.
Musk was confident that funding was secured
Regarding the allegations, Musk said in court that he had not written that the secured funding was “a fact”. He only expressed his personal thoughts. And he was convinced that the financing had been secured. For one thing, the State Investment Fund of Saudi Arabia had previously pledged its full support for such a deal. On the other hand, he himself had the necessary leeway to have enough money by selling shares in his space company SpaceX.
However, when questioned by the plaintiff’s attorney, Musk admitted that the Saudi investment fund only learned the proposed price of $420 per share from his tweets. The fund then also requested more details about the plan in writing, otherwise it would not be possible to decide whether to participate in the deal. Musk called it a “backtracking” from previous commitments.
Worry about reporting
Musk also said he dropped the tweets out of concern that the Financial Times newspaper would reveal the proposed deal. At the same time, he admitted that he did not know what exactly the newspaper knew – in fact, the newspaper only reported that the Saudi fund had acquired a stake in Tesla. The article made no mention of plans to withdraw from the stock exchange.
The tweets about Tesla also got Musk into trouble with the US Securities and Exchange Commission. As part of an agreement, he 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 from then on.
The current trial comes at a bad time for Musk. Tesla stock has plummeted in value over the past few months. Critics accuse the feisty entrepreneur of focusing too much on the short messaging service Twitter, which he bought for $44 billion at the end of October, while neglecting Tesla.