Home » US business news » Elon Musk tells court his Tesla go-private tweet had ‘unequivocal’ backing

Elon Musk tells court his Tesla go-private tweet had ‘unequivocal’ backing

By Nithya Bose in US business news, posted January 24, 2023

Elon Musk has told jurors his controversial “funding secured” tweet was true, as his trial continues

The billionaire said he had lined up financial backing from Saudi investors in 2018 to take Tesla private.

Mr. Musk told the court that he might have used his stake in SpaceX, the rocket company where he is the CEO to support a buyout.

He justified his intentions behind the 2018 tweet by saying, "With SpaceX stock alone, I felt funding was secured" for the buyout, without giving more details.

But the plaintiff investor’s lawyer Nicholas Porritt questioned if he intended to use his SpaceX stake to finance the deal, which would have boosted his stake in Tesla.

Porritt noted Musk had told Tesla staff he predicted his stake in Tesla to stay unchanged after the deal.

Musk spoke quietly and calmly in the court for around five hours, revealing he “had trouble sleeping last night” and that his back hurt.

Musk is in court defending himself against charges that he misled investors with his August 7, 2018 post.

It claims he had "funding secured" to take Tesla private for $420 per share and that "investor support is confirmed."

Musk said he decided not to make Tesla private after receiving a lukewarm response from some investors and that he wished to avoid a lengthy process.

Tesla's stock price soared after Musk's 2018 statements, only to plunge when it became evident that the buyout would not actually happen.

As a result the investors who brought the case claim to have lost billions.

Musk told Porritt that he met with representatives of Saudi Arabia's sovereign wealth fund, the Public Investment Fund, at Tesla's Fremont, California, factory on July 31, 2018.

He admitted that a price was not negotiated, but said Saudi representatives said unequivocally that they would go to whatever length to make a deal happen.

That never materialized, Musk said, because the fund's governor, Yasir Al-Rumayyan, later backpedaled on the commitment to take Tesla private.

However, Porritt later told the court that written evidence contradicted Musk's testimony regarding the Saudis' original intentions.

He said the minutes of their discussion revealed the Saudis wanted to know more about Musk's intentions.

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Musk then said he would have traded his SpaceX stake to support the deal, just as he did with his Tesla stake to help fund his effort to take Twitter private last year.

He is set to testify for the third time later today (Tuesday, January 24).

The nine-person jury will determine if the billionaire artificially lifted the company's share price by playing up the prospects of the purchase, and if so, to what extent.

Musk testified that while posting about the financing, he was saying "not that it will happen, but that I am thinking about it," and that it was his "opinion" that funding was secured.

Last May, US District Judge Edward Chen ruled that Musk's tweet was untruthful and reckless.

The trial continues.

Source: Reuters

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