Elon Musk defends himself in court against ‘outrageous’ accusations over 2018 tweets
AFP, Posted on Tuesday, January 24, 2023 at 02:00 am
Elon Musk tried to show in court Monday that his famous 2018 tweets about his desire to take Tesla public were not deceptive or fraudulent, contrary to accusations from investors who say the billionaire lost millions of dollars.
Since late October, the head of Tesla and Twitter has assured that he “never” tried to deceive investors and that the fraud accusation is a “scandal”.
He caused a stir on August 7, 2018, by announcing that he wanted to take the auto group public at a price of $420 per share, then confidently saying that financing was “secure”.
“I wasn’t saying it was done, I was just saying I was considering it, I was thinking about it. And I think the financing is secured,” Elon Musk said on the stand in court. The trial was held in San Francisco.
Last week, Nicholas Porritt, the plaintiffs’ lead lawyer, accused the chief executive of “lying” and being responsible for investors’ losses.
Shares rallied in the wake of the highly unusual tweets (and Nasdaq temporarily halted Tesla’s share price) and fell in the days that followed. News articles eventually revealed that the boss really didn’t have the funds.
Tesla remained listed on the stock exchange.
With his questions, Nicholas Porritt tried to show that Elon Musk had not been properly consulted, and had neither the necessary elements nor the authority to make such a sensational statement, especially on Twitter and especially when the markets were open.
– “Mr. Tweet” –
The lawyer highlighted an August 12, 2018, heated exchange between the billionaire and Yasir Al-Rumayyan, director of the Saudi sovereign wealth fund, who, according to Elon Musk, “resolutely” and “without hesitation” committed to financing the operation.
“The finances weren’t really secure, were they?” Porritt asked.
Yasir Al-Rumayyan “backpedaled”, responded to Tesla’s boss.
He asserted that he has the ability to sell his shares in another flagship, SpaceX, “the most valuable unlisted company in the United States.”
“It would break my heart (to sell them), but I would do it if I had to,” he said, referring to how he had to part with his Tesla shares to buy Twitter last year.
Dressed in a dark suit, white shirt and tie, he appeared flustered, didn’t remember many of the emails and details, and often answered questions to repeat the messages he wanted to convey to the jury.
So much so that the investor’s lawyer lost his patience. Before correcting “Mr. Musk,” Nicholas Porritt said, “We spent the whole day together in Austin, remember Mr. Tweet?!”
– “Karma” –
The prosecution also returned to Elon Musk’s proposed price of $420 per share. In the US, the numbers 4 and 20 together are associated with cannabis consumption. When the billionaire proposed to buy Twitter last spring, he chose a price of $54.20 per share.
“Round up to 420 as a game to your girlfriend?” asked Nicholas Porritt.
“It wasn’t a joke, it was a 20% premium over the share price,” Elon Musk replied, but admitted there was “some karma around 420.”
“I’m not sure if it’s good or bad karma at this point,” he joked again.
His lawyer, Alex Spiro, later helped paint a portrait of an immigrant who came from nothing to the United States “where great things are possible” after an “unfortunate” childhood in South Africa, according to the billionaire.
“I’ve been called crazy many times,” Elon Musk said after listing the companies he co-founded.
However, he attributed his success to his “honesty” with investors, boasting that “at this point I believe I have raised more money than anyone else in history.”
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.”
The US stock market police SEC, in turn, forced Elon Musk to resign as chairman of the board of directors, pay a fine and have his tweets directly related to Tesla’s operations pre-approved by a lawyer.
