SAN FRANCISCO, Jan. 23 (Portal) – Elon Musk testified Monday that he was certain he was backed by Saudi financiers to take Tesla Inc (TSLA.O) private in 2018, as he defended against claims he had investors scammed by later tweeting about his electric car company.
At a trial in federal court in San Francisco, Musk told investors’ attorney Nicholas Porritt that on July 31, 2018, he met with representatives of Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, at the Tesla factory in Fremont, California , met.
Musk said he did not discuss a takeover price, but Saudi officials made it clear they would do whatever it takes to facilitate a takeover.
“PIF clearly wanted to take Tesla private,” he said.
The trial will test Musk’s penchant for posting his sometimes irreverent views on Twitter and when the world’s second richest person can be held liable for crossing a line.
Millions of dollars are at stake for shareholders who claim they suffered losses after Musk tweeted on Aug. 7, 2018 that he had “secured funding” to take Tesla private for $420 a share and that “Investor support is confirmed.”
Tesla’s stock price surged following Musk’s tweets and later fell when it became clear the acquisition would not happen.
A jury of nine will decide whether the billionaire artificially inflated Tesla’s share price by touting the prospects of the acquisition, and if so, by how much.
Plaintiffs have already cleared steep legal hurdles in the rare securities class action, with US Judge Edward Chen ruling last May that Musk’s post was untrue and reckless.
But in Monday’s testimony, Musk said he believed he could have sold enough shares in his rocket company SpaceX to fund an acquisition and “felt funded by SpaceX stock alone.”
‘NO JOKE’
Musk was also sued by the U.S. Securities and Exchange Commission over the tweets, resulting in a total of $40 million in settlements for him and Tesla and requiring a Tesla attorney to pre-screen some of his tweets.
The SEC had claimed that Musk rounded down the alleged takeover offer from $419 to $420 per share because he recently learned of the “importance of the higher amount in marijuana culture” and thought his girlfriend would make fun of it Find.
Musk denied thinking that.
“It was chosen because it was a 20% premium to the stock price,” he testified. “The price of $420 was no joke.”
Musk testified calmly, in contrast to his occasional combative statements at previous trials.
He began testifying on Friday, telling jurors that while Twitter, which he bought in October, is the most democratic way of communicating, his tweets haven’t always impacted Tesla shares in the way he expected.
“Just because I tweet something doesn’t mean people believe it or act on it,” Musk said.
Alex Spiro, Musk’s attorney, said in his opening remarks last week that Musk believed he had Saudi funding and tried to protect the “ordinary shareholder” from media leaks by tweeting, even though his tweet contained “technical inaccuracies.”
The defendants also include current and former Tesla directors, who Spiro said had “pure” motives in their response to Musk’s plan.
Reporting by Hyunjoo Jin in San Francisco and Jody Godoy in California Editing by Noeleen Walder, Peter Henderson and Matthew Lewis
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