Photographers and TV cameras guarded the courthouse gate. This Friday was the day that Elon Musk had to testify for the famous two words (“secured funding”) of a tweet suggesting he would make a takeover bid for Tesla and moving the company’s stock. Some shareholders sued him and his testimony began this Friday and will continue on Monday. Musk slipped away in a Tesla – of course – with tinted windows and tried to avoid the bulge on the stand. “Just because I tweet something doesn’t mean people believe it,” he explained.
Cameras were not allowed in the room and the image of him that emerged is that of the courts’ usual caricature. According to the blogs, which counted the statement almost live and what was gathered by news outlets present in the room, including AP, Bloomberg and Portal, Musk appeared in a dark suit and tie and explained only about 25 minutes before the meeting was adjourned. to 8:30 a.m. Monday in San Francisco (5:30 p.m. in mainland Spain).
Musk argued that Twitter is “the most democratic way” to communicate with retail investors. He said his tweets are information he believes “the public should hear” but apologizes that “there is a limit” to what he can communicate with the 240 characters that make up a Twitter message allows. “Of course you can have more words in an official statement. Everyone on Twitter gets it,” he said.
I think you can be absolutely honest [en Twitter]. But can you be exhaustive? Of course not,” he defended himself. In fact, I barely use a quarter of the available space in the controversy’s famous tweet: “I’m considering listing Tesla for $420. Funding secured,” he said in that Aug. 7, 2018 message, providing the number used to refer to marijuana as the price of the offering.
I’m considering taking Tesla private for $420. financing secured.
— Elon Musk (@elonmusk) August 7, 2018
After his initial tweet, Musk, along with others, insisted that an upcoming surgery was proposed. “Shareholders can sell at 420 or keep the shares [en la compañía excluida de Bolsa]”, added first. And he returned to the accusation: “The support of the investors is confirmed. The only reason it’s not certain is because it depends on shareholder votes,” he later said. in another tweet. He even sent a message to staff explaining his plans.
Tesla’s shares soared (and fell when it emerged there hadn’t been a takeover bid to delist the company), but Musk tried to decouple that move from his tweet in court this Friday. “Tesla stock goes up and down all the time,” he once said. “Just because I tweet something doesn’t mean people believe it or act on it,” he also argued, affirming that “correlation is not coincidence.”
As an example, he cited that he once tweeted that Tesla’s stocks were “too high” but then the price went up even more. “It was counterintuitive,” Musk said. “The causal link is clearly not there because of a tweet,” he added. In fact, although the mogul has stated as much, Tesla shares are down 9% on the day he posted this tweet, although they later regained ground in subsequent tweets.
When the plaintiff’s attorney showed him emails from Tesla investors urging him to reduce or stop tweeting about the company prior to the controversial news, Musk said he couldn’t remember those messages from years ago, especially since she’s a “Niagara Falls” of the emails.
The car that Elon Musk was reportedly driving when he arrived at the San Francisco courthouse where the trial for his tweets about Tesla is taking place. GEORGE NIKITIN (EFE)
The Securities and Exchange Commission (SEC) has already launched an investigation into the apparent price manipulation. Musk has agreed to step down as President of Tesla (although he remains CEO), accept a $40 million fine ($20 million to be paid by him and an additional $20 million by Tesla) and future ones Subjecting tweets about him to the surveillance of the manufacturer of electric cars. On the podium this Friday, he acknowledged that his 2018 tweets were not verified by Tesla. In another parallel case, Musk is now suing against this oversight, claiming that it violates his freedom of expression.
During his testimony, Musk told the nine-person jury that will decide the case that 2018 was an “extremely painful and difficult year” for Tesla and himself, adding that he “slept at the factory to make things happen.” function”. Musk said, “The sheer pain of making Tesla successful during this period of 2017-2018 was unbearable for me and many others,” he tried to justify.
During the survey, Musk was also asked about short sellers, investors who take positions to take advantage of falling prices. He first joked that they aren’t “salesmen who are small,” but “a bunch of sharks” who want Tesla to “die very badly.” He claimed that short selling is a bad practice and should be illegal in his opinion.
The owner of Twitter tried unsuccessfully to move the trial to Texas, where Tesla is now headquartered. Musk argued that a San Francisco jury could be biased against him, especially given the layoffs that have affected half of Twitter’s workforce and his messy takeover of the social network. The judge has already found those tweets false, and the jury must decide whether Musk intentionally misled investors and whether his statements caused them losses.
The lawsuit against Musk is civil. Investors who bought in the heat of the potential bid and sold at a loss when that prospect was emptied are demanding millions of dollars in compensation. Tesla has doubled its shares since 2018. That $420 would equate to $28 for each of the current shares. The company has risen much more sharply in the stock market. It surpassed $400 in 2021 and even after the 2022 crash it is now trading above $130. Thus, those who continued to be shareholders, whether caught in the heat of the bogus offer or not, did not lose money but multiplied it.
In the lawsuit Twitter filed against him for wanting to withdraw his bid, Musk avoided a near-certain defeat by agreeing to honor the original agreement, but he faces regular court cases: in December 2019, he won one Defamation lawsuit Los Angeles. He also later won a battle against investors who were suing him over Tesla’s acquisition of SolarCity. In November, he testified in Delaware’s Chancery Court in a lawsuit over his $55 billion compensation package that a shareholder claims to be voided for “unjust enrichment.”
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