Musk to return to stand in fraud trial over 2018 Tesla tweet
Millions of dollars are at stake as well as the reputation of Musk, whose personal stature is a central asset of the Tesla brand. The trial will test whether Musk’s tendency to take to Twitter to air his sometimes irreverent opinions mislead investors and harm the company’s value.
The case is a rare securities class action lawsuit and the plaintiffs have already cleared high legal hurdles, with US Judge Edward Chen ruling last year that Musk’s post was untruthful and reckless . Shareholders claim they lost millions after Musk tweeted he had “secured funding” to take Tesla private.
Musk on Friday called Twitter, which he bought in October, the most democratic way to communicate but said his tweets have not always affected Tesla stock as he expected.
“Just because I tweet something doesn’t mean people will believe it or act on it,” Musk told the jury in San Francisco federal court.
The billionaire is expected on Monday to address why he insisted he had the support of the Saudi investor to take Tesla private, which never happened, and whether he knowingly made a materially misleading statement with his tweet.
Some lawyers outside the trial said he appeared to be thin-skinned and could be administered with a needle. But Musk on Friday spoke slowly and in a sometimes distracted manner, in contrast to his occasionally combative testimony in past trials.
Musk described the difficulties the company went through around the time he sent the “guaranteed funding” tweet.
He was asked about messages sent to him by Tesla investor Ron Baron, urging him to stop using Twitter, but Musk said he did not remember and received thousands of messages.
He discussed the challenges the company faced at the time, including bets by short sellers that the stock would decline.
“A bunch of sharks on Wall Street wanted Tesla to die, very badly,” he said.
Musk’s lawyer, Alex Spiro, told the jury in his opening statement Wednesday that Musk believed he had funding from Saudi backers and was taking steps to make the deal happen. Fearing leaks to the media, Musk tried to protect the “everyday shareholder” by sending the tweet, which contained “technical inaccuracies,” Spiro said.
A jury of nine will decide whether the tweet artificially inflated Tesla’s share price by playing up the financing status for the deal, and if so, by how much.
The defendants include current and former Tesla directors, who Spiro said had “pure” motives in their response to Musk’s plan.
(Reporting by Jody Godoy and Tom Hals; Editing by Noeleen Walder, Peter Henderson and Daniel Wallis)
By Jody Godoy and Tom Hals