Musk had announced on Twitter at the time 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.
Tesla investors fail with class action lawsuit
Investors subsequently sued Musk. They accused the second richest person in the world of lying and “artificially manipulating” the price of Tesla shares with the aim of harming all investors who had bet on a falling share price. Referring to Musk during the trial, one of the plaintiffs’ attorneys said, “Because of his lies, ordinary people have lost millions and millions of dollars.”
However, the nine jurors found that the plaintiffs failed to establish that Musk was responsible for their stock market losses. The process took a total of three weeks. After deliberating for only two hours, the jury found the defendant not guilty. Musk immediately praised the “wisdom of the people” via Twitter and went on to explain: “I am deeply grateful to the jury for unanimously recognizing my innocence.”
The Tesla boss had always denied the allegations of fraud. In his personal testimony in court, he argued 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 was secured at that moment.
The tweets about Tesla also got Musk into trouble with the US Securities and Exchange Commission. He had to step down as chairman of Tesla’s board of directors, pay a $20 million fine, and resign as part of an agreement from now on have tweets about Tesla approved by a lawyer.
The trial came amid tumultuous times for Musk. Critics accuse the pugnacious entrepreneur of concentrating too much on the short message service Twitter, which he bought for 44 billion dollars at the end of October after a long takeover dispute, and of neglecting Tesla. However, the numbers at the electric car manufacturer seem to speak more for Musk
: The group announced at the end of January that it had made record profits in 2022.