Elon Musk told a judge that he was attempting to do the “right thing” when he tweeted that he had sufficient backing to take Tesla private.
The CEO of an electric vehicle manufacturer is on trial after investors claimed a tweet from 2018 cost them millions of dollars when a deal fell through.
Mr. Musk asserts that he met with a Saudi Arabian sovereign wealth fund that expressed support for a transaction.
However, he stated that he never mentioned a specific sum of funding.
Mr. Musk is accused of misleading investors after tweeting on August 7, 2018, claiming he had “got finance” to take Tesla private for $420 per share and that “investor support is assured.”
The post caused Tesla shares to skyrocket, but a few weeks later, when Mr. Musk announced that the plan would no longer be implemented, they plunged precipitously, resulting in substantial outrage for the entrepreneur.
The US regulator, the Securities and Exchange Commission (SEC), compelled him to resign as Tesla’s chairman and required an independent committee to review any tweets relating to the company.
In addition, he and Tesla were each fined $20 million to resolve an SEC charge that he had committed securities fraud.
Mr. Musk and his counsel argued at Tuesday’s jury trial in San Francisco that the proposal was seriously discussed for almost two weeks, including discussions with important investors and other parties.
Tesla was authentic in a fraud lawsuit
Mr. Musk abandoned the plan after smaller investors told him they wanted the company to stay public.
“I felt it was necessary to be sensitive to their desires,” he added, citing a letter from Cathie Wood, chief executive of Ark Investment, a company that manages billions of dollars in assets.
Mr. Musk stated that he believed revealing his evaluation of the prospective takeover was the “proper thing to do” since he was concerned that a Financial Times piece regarding Saudi Arabia’s position in the company would disadvantage ordinary investors.
“I believed I was doing the right thing,” he stated on the third day of his testimony, Tuesday.
“When I received the Financial Times article, I was afraid that the information had leaked and that some investors would learn that I was considering taking the company private, which would be detrimental to other investors, particularly small owners.”
On Monday, Mr. Musk told a San Francisco court that he met with Saudi Arabia’s Public Investment Fund.
Despite not discussing the cost of taking Tesla private, fund officials supported a deal, he said.
Mr. Musk asserted that the fund’s governor, Yasir Al-Rumayyan, subsequently appeared to backtrack on the agreement.
“When we met, he had expressed clear support for taking Tesla private. But now he appeared to be shifting his position,” he stated.
‘Not a joke’
Mr. Musk was also questioned how he arrived at $420 per share and if it was a marijuana reference.
In American counterculture, the importance of 420 is supposed to have originated from a group of California students in the 1970s who used to gather around 4:20 p.m. to smoke marijuana and seek cannabis plants.
Eventually, tens of thousands of people gathered on April 20 to celebrate marijuana. In the United States, dates are written with the month number first, followed by the day number, as in 4/20.
Musk told the court he occasionally smoked cannabis in public. “420 was not selected as a joke; it was selected because there was a 20% premium over the stock price.”
He said that there was “some karma about 420,” although he questioned whether it was positive or negative.
Mr. Musk, who acquired Twitter for $44 billion last year. Told the court on Friday that he did not believe his tweets had affected Tesla’s stock price.
“Just because I tweet something does not mean others will believe or act on it,” he told the jury.
He is “off his rocker”
Mr. Musk’s testimony will continue on Tuesday. Concerned that a jury might be biased against him as a result of media coverage of the businessman. He requested to have the trial transferred from California to Texas.
Following his acquisition of the San Francisco-based Twitter, thousands of employees were laid off.
Mr. Musk’s attorney, Alex Spiro, stated, “We do not believe we can receive a fair trial in this district, period.”
The media reports, according to Mr. Spiro, are character attacks.
Judge Edward Chen ruled against the request.
During jury selection, prospective jurors voiced a variety of sentiments toward Mr. Musk. Some referred to him as “clever” and “a genius.”
Someone else described him as “a touch off his rocker.”
One woman stated, “He is not a particularly likable person.”
When asked by the judge if this meant that she would not be impartial towards him, the woman replied. “Many people are not necessarily likable; sometimes I don’t even like my husband.”
