Elon Musk admitted that he hadn’t signed anything, that he hadn’t even discussed numbers with investors, but he assured tweeting that he had “secured the funding” to make a takeover bid at $420 a share Rule out Tesla de Bolsa, he did it because he was convinced of it. What’s more, as he told a jury in a San Francisco court this Tuesday, he’s never had trouble getting money.
“All the funding rounds that I had were oversubscribed,” he said Tuesday in federal court in San Francisco in response to questions from his own attorney, according to statements collected by Bloomberg. “It’s not a problem for me to collect money. I’ve done a good job for the investors and if you do a good job, they give you money,” he added.
I’m considering taking Tesla private for $420. financing secured.
— Elon Musk (@elonmusk) August 7, 2018
Musk has received a class action lawsuit from shareholders who were harmed by this Aug. 7, 2018 tweet because they believed this offer would exist because they bought shares and ended up losing money when there was neither financing nor a takeover bid and Musk confirmed that Tesla would continue to list on the stock exchange. The judge has clarified that that statement (for which he has already been sanctioned by the Securities and Exchange Commission and had to leave the presidency of Tesla) was false, and whether he intended to deceive if it affected the price is being debated and whether investors suffered losses as a result.
However, the tycoon continues to defend that what he did in writing this and other tweets that suggested an imminent takeover bid was the right thing to do. He asserts that he did so when he learned that the Financial Times would publish that the Saudi sovereign wealth fund, one of the negotiating partners, had plans to buy between 3% and 5% of Tesla and feared that it might sei plans to be excluded from the stock corporation. As he defended in court, tweeting is “the most democratic way” to communicate with small shareholders.
During his remarks, Musk defended that he could sell SpaceX stock if necessary (an argument he built into his defense at the last minute) since he was dealing with Tesla stock to buy Twitter. But he has stressed that he also had the Saudi sovereign wealth fund, with the backing of Goldman Sachs and its ability to attract money from other investors, so funding was secured for him.
He and his attorney this Tuesday showed a message from a Goldman Sachs banker, Dan Dees, praising the letter Musk posted on the company’s website, discussing the possible operation: “Your Today’s letter seemed excellent to me. Very clearly. We at GS are standing by and ready to help. Call me for anything – 24/7,” he wrote in an email.
“JP Morgan hates me”
During the interrogation, his bad relationship with JP Morgan, the largest bank in the US, came up after a financing application from Tesla was rejected. “I pulled all of JP Morgan’s commercial banking operations, which made JP Morgan hate Tesla and me, to say the least,” he said.
Elon Musk gets into a car after leaving to testify in court. GEORGE NIKITIN (EFE)
On his third day of statements, Tesla’s founder and still CEO also emphasized that his tweet said he was “considering” making the offer, not that it was a closed matter. “That’s what you mean when you say you’re thinking about it, you’re thinking about it, but you haven’t made up your mind one way or the other,” he said.
In recent days he has tried to separate Tesla’s stock movements from his tweet: “Just because you tweet something doesn’t mean people will believe it or act on it,” he said, although the evidence seems to show that the market has moved on his famous tweet.
For that reason, in his statement on Tuesday, his strategy focused more on the fact that he had no intention of deceiving: “I didn’t have a bad reason,” he said. “My intention was to do the right thing for all shareholders,” he added.
She also fought back on the other front, that of the casualties of those allegedly injured. While there may be investors who closed their positions at a loss, those who bought shares in 2018 and held them today would have made big bucks. The $420 per share at the time would be $28 for each of the current shares since there were two splits.
The company has risen much faster than the stock market. It surpassed $400 in 2021, and even after the 2022 crash, it’s now trading above $140, giving shareholders who bought and didn’t sell back then quintupled their money. “It would have been the best investment in the stock market,” Musk said. He was asked if he was sorry that some investors lost money because of his tweets. “Of course I never want an investor to lose money and if I lost it because of this tweet I would of course be sad,” he replied, but qualified: “Investors are buying and selling stocks all the time. Together they did very well,” she praised her shareholders.
The tycoon claims he was ultimately inclined not to make an offer because retail investors “said they would prefer Tesla to continue trading.” “I thought it was important to cater to their wishes,” he added.
The trial continues with other witnesses, but Musk finished testifying this Tuesday. In previous sessions, he had driven in and out of court in a Tesla with tinted windows. When he left, he had his picture taken for the first time.
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