Investors sue over tweets
Musk: Tesla withdrawal from the stock market was secured
01/23/2023 10:04 p.m
Tesla investors accuse Elon Musk of influencing the price of the electric car manufacturer’s shares with tweets in 2018. The billionaire Tesla and Twitter boss is now defending his choice of words. However, the 51-year-old also had to make some concessions to the plaintiff’s lawyer.
Tesla CEO Elon Musk has defended his choice of words in 2018 tweets that sparked a potentially costly investor lawsuit. Most notably, his claim that funding was secured to take Tesla private at a price of $420 per share. Musk argued in court in San Francisco that his stake in the space company SpaceX alone was sufficient to pull off such a deal. The investment fund of Saudi Arabia has also pledged support.
The lawsuit includes a class action lawsuit filed by investors who allege Musk’s tweets caused price fluctuations that caused them to lose money. The considerations of taking Tesla from the stock exchange were quickly abandoned at the time. Lawyers for the plaintiff investors want to convince the jury that Musk’s claims about secured funding were a lie.
After questions from the plaintiff’s lawyer, Musk now confirmed that the Saudi investment fund only found out about the proposed price of $420 per share from his tweets. He also admitted that he did not speak to investors other than this fund before briefing Tesla’s board of directors on its plan to delist the electric carmaker from the stock market. He dropped the tweets out of concern that the intent might become public in a Financial Times report, he said. At the same time, when asked by the lawyer, he admitted that he had not known exactly what the newspaper had found out.
Judge Edward Chen found in the proceedings last year that Musk’s statements in the tweets were not true. This was pointed out to the jury at trial. However, they should assess whether these statements were relevant to investors – and caused them damage because they had relied on them. They also need to determine whether Musk was aware that he was making false statements.