Musk found not guilty of Tesla tweet fraud
In less than two hours, nine jurors unanimously clear Musk of wrongdoing in a Tesla shareholder class action suit, taken over a tweet in which he said he had “funding secured” to take the electric carmaker private in August 2018. The proposed $72bn (£60bn) buyout never materialised. Sharholders claimed Musk had lied when he tweeted later in the day that “investor support is confirmed”. According to an economist hired by the shareholders, investor losses were calculated as high as $12bn. During the three-week trial, Musk, who took the stand for nearly nine hours, argued he thought he had a verbal commitment from Saudi Arabia’s sovereign wealth fund for the deal.
Musk tweets his thansk to the jurors:
Thank goodness, the wisdom of the people has prevailed!
I am deeply appreciative of the jury’s unanimous finding of innocence in the Tesla 420 take-private case.
— Elon Musk (@elonmusk) February 3, 2023
Musk: I had enough funds to take Tesla private
On his second day of testimony in a court case where he is accused of artificially boosting Tesla’s stock price with a tweet, Musk says that he had sufficient financial backing to take Tesla private. Musk says he believed it was “a done deal” that the Saudi Arabia’s Public Investment Fund would support a possible attempt to take Tesla private at $420 a share, a 20 per cent premium at the time, though he acknowledged there was no contract and that many details had not been worked out.
Musk said the PIF had “many multiples” of what was required to take Tesla private, especially because it was not expected to purchase the entire company, and added that his own shares in SpaceX, his rocket company, would make up for any shortfall.
It’s important for the jury to know that
Musk, said it was “difficult to say” if Tesla shares would rise or fall based on his tweet, because markets can act in “counter-intuitive” ways, but admitted it was more likely it would rise.
I expected that there (would) probably be some increase in the stock price — seems likely. If you say that you’re considering taking a company private or acquiring a company . . . there is going to be some premium . . . In this case, I’m clear about what the premium would be.
Mussk disagreed with the shareholders’ lawyers, who suggested the $420 price was based on a reference to cannabis that his girlfriend at the time found funny, saying he was applying a 20 per cent premium to the stock, then rounding up slightly.
There is some karma around 420, although I’d question (whether it) is good or bad karma, at this point