Elon Musk is taking the stand to defend himself against fraud allegations

Posted on Saturday, January 21, 2023 at 1:10 am

Elon Musk took the stand Friday in a lawsuit in San Francisco accused of defrauding investors after he tweeted plans to take Tesla public more than four years ago.

In a dark suit, white shirt and tie, he took to Twitter for half an hour to defend his style of communication and his success at the head of the car group. His testimony is due to continue on Monday.

Since the end of October, the Tesla and Twitter boss made a surprise announcement on August 7, 2018 that he wanted to take his group public for $420 a share, and then the financing happened. “safe”.

“Elon Musk, who was the (then) CEO of Tesla, lied and his lies caused people to lose millions of dollars,” Nicholas Porritt, an attorney for the class plaintiffs, said Wednesday.

On August 10, 2018, they filed a complaint against the business executive for “artificially manipulating Tesla’s stock price to the utter detriment of investors” who were betting on a price drop.

Asked by Mr Porritt on Friday about his opinion of this type of investor, Elon Musk said these bearish assumptions “should be illegal”.

“These are bad people stealing money from small investors. They want Tesla dead (…) and they are willing to do anything to kill the company, it’s bad,” he continued to the jury’s intent.

– “Reckless” –

His lawyer, Alexander Spiro, assured on Wednesday that Elon Musk intends to delist Tesla and has no doubts about his financial capabilities thanks to the guarantees of the Saudi sovereign wealth fund.

The tweet was written “hastily” and the choice of words was “careless”, but it was “not a scam”, he said.

On Friday, a lawyer for the plaintiffs tried to show that Elon Musk and his entourage are well aware of the consequences of his excessive willpower on Twitter.

He referred to one of his tweets from July 2018, calling a British caver who criticized him a “pedo boy”.

“Did you take a Twitter break?” Porritt said, citing advice from a top Tesla executive and an investor. he asked.

“I don’t think so,” replied the billionaire.

Tweeting is “the most democratic way to communicate. It gives all investors, big or small, access to the same information,” he explained.

He also said market reactions to his tweets are often unpredictable and took the opportunity to recall how difficult 2018 has been for Tesla.

“I slept in the factory not by choice, but by compulsion,” he insisted, adding that the fact that it was listed on the stock exchange was an additional limitation because the company had been hit by attacks.

Immediately after the offensive tweets, Tesla shares rose to $386.48. It fell to $335.45 a share on Aug. 16, far from the $420 a share that Musk had listed, according to figures presented to the jury by Judge Edward Chen on Tuesday.

– “Illusive” –

The trial is expected to last three weeks. In a previous ruling on the case, the judge ruled that the popular 2018 tweet could be considered “false and misleading.”

One of the plaintiffs, Timothy Fries, said Friday that he invested in Tesla the day after the messages were posted on Twitter.

For him, the message “financed” means that Elon Musk has “a committed partner with confirmed funds.”

But in the following days, the share price fell. “I lost $5,000. I hope to make up for my losses,” Fries said.

The billionaire’s proposal was “incomplete, inconsistent and illusory in certain aspects.”

The manufacturer quickly abandoned the idea of ​​​​leaving the rating.

But America’s stock police, the SEC, believed he had failed to provide evidence of his financing, forcing him to step down as chairman of the board, pay a $20 million fine, and require that his tweets directly related to Tesla’s operations be pre-approved by an attorney.

“Elon Musk sees this lawsuit as a way to get the SEC to reconsider this decision,” said Josh White, a former economist at the federal agency.

“He thinks he did nothing wrong and has the right to say what he wants on Twitter.”

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