Elon Musk appeared in court on January 20, 2023, to defend a tweet from 2018 in which he claimed to have secured the finance to take Tesla private in a deal that was never close to materializing.
The tweet led to a $40 million settlement with securities regulators. In addition, it sparked a class-action lawsuit alleging that he defrauded investors, which required him to appear in court for around 30 minutes to give sworn testimony in front of a nine-person jury and a packed courtroom of onlookers.
When he first took the witness stand, Musk defended his frequent tweeting as “the most democratic approach” to sharing information, even if he acknowledged that the 280-character limit on Twitter sometimes makes it challenging to be as precise as possible.
Musk said on the witness stand, “I think you can certainly be truthful on Twitter.” “But can you be comprehensive? Obviously not.”
The trial’s outcome depends on whether two tweets, sent by Elon Musk on August 7, 2018, hurt Tesla shareholders in the 10 days before Musk acknowledged that the planned buyout would not happen.
Before Musk entered the stand, U.S. District Judge Edward Chen ruled that the jury might consider those two tweets to be untrue, leaving them to assess whether Musk intentionally misled investors and whether his words caused them to suffer losses.
Musk has argued in the past that he was coerced into signing the SEC settlement and that during talks with officials from Saudi Arabia’s Public Investment Fund, he thought he had secured funding for a takeover of Tesla.
The trial was adjourned for the weekend, but Musk was asked to return on January 23, to answer more questions.
On January 23, Musk told the jury he was confident he had secured financial backing from Saudi investors in 2018 to take Tesla private and that he might have even been able to use his interest in the rocket company, SpaceX, to help finance a buyout.
Referring to the aerospace business where he also serves as CEO, “With SpaceX stock alone, I felt funding was secured,” for the buyout, he told the jury without providing any other information.
However, Nicholas Porritt, the attorney for the plaintiff investors, raised doubts about whether he had intended to utilize his investment in SpaceX to finance the transaction, which would have boosted his interest in Tesla. Porritt emphasized that Musk had previously told Tesla staff that he anticipated his share in the company to stay largely unchanged following the transaction.
Porritt was informed by Musk that on July 31, 2018, he met with representatives of the Public Investment Fund of Saudi Arabia at the Tesla factory in Fremont, California. Although he admitted that a takeover price was not brought up, he claimed that the Saudi representatives made it clear they would go to any lengths to complete a buyout.
Musk claimed it never happened because Yasir Al-Rumayyan, the fund’s governor, later backtracked on his promise to take Tesla private. “When we first met, he had been unwavering in his support for taking Tesla private, but now,” Musk claimed, he appeared to be changing his mind.
Later, Porritt testified before the court that the minutes of their discussion showed that the Saudis wanted to know more about what Musk had in mind, contradicting Musk’s claim that written proof supported the Saudis’ initial objectives.
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