A panel of nine jurors will hear opening arguments in a trial Wednesday over Elon Musk’s tweets alleging he “secured the funding” to take Tesla private in 2018.
The class action lawsuit was filed by investors who allege that Musk artificially inflated Tesla’s share price when he tweeted in August 2018 that he was considering privatizing the electric-car maker at a price of $420 per share. and have funding to do so . A deal never materialized. Shareholders claim the contributions ultimately caused them significant financial losses as Tesla shares were whipped in response.
Musk argues that his posts, which sent Tesla stock price skyrocketing and ended the day up 11 percent, were based on talks with financiers at the Saudi Arabian Public Investment Fund and an agreement he described as a “handshake.” ‘ considered taking the company out of the public markets.
The opening statement was scheduled to begin Tuesday, but US District Judge Edward Chen in San Francisco acknowledged that jury selection took longer than expected as both sides in the case debated the neutrality of prospective jurors.
Musk’s attorneys had previously tried unsuccessfully to move the trial from California to Texas, where Tesla is now based, amid fears that the San Francisco jury pool would be damaged due to dissatisfaction with Musk’s recent Twitter management, which has included cuts , almost half of its 7,500 employees could be affected.
During the selection process, a prospective juror called Musk “arrogant,” “unpredictable,” and “sometimes irrational.” Another said: “I think he’s a bit of his rocker.” Ultimately, a nine-member jury was selected, consisting of seven men and two women.
The process should take about 10 days.
In a previous ruling, Chen said the jury should consider Musk’s tweets inconsiderate and false. The jury will determine whether he knowingly and materially misled investors and whether the plaintiffs are owed damages.
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The extensive list of potential witnesses includes Musk; Members of the Tesla Board of Directors, Chief Financial Officer and Head of Investor Relations; and Silicon Valley figures like Silver Lake managing partner Egon Durban and Oracle co-founder and Musk confidante Larry Ellison.
Musk’s legal team is also asking Saudi Arabia’s sovereign wealth fund head Yasir al-Rumayyan and several other PIF figures to testify at the trial. PIF has filed a motion to have the application blocked, arguing that the San Francisco court has no jurisdiction to compel the Saudi executives to appear.
Earlier court filings showed how Musk and al-Rumayyan’s relationship quickly deteriorated over text messages as media reports of the Go-Private discussions began circulating.
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The “funding secured” tweet has proved costly for Musk. He and Tesla each paid $20 million to settle lawsuits brought by the US Securities and Exchange Commission. Musk was also forced to step down as the automaker’s chairman, although he retained his position as chairman of the board.
The legal showdown comes at a time of severe market turmoil for Tesla. The company’s share price has fallen 61.7 percent over the past 12 months as demand for its cars has eased. Some investors also believe Musk’s recent purchase of Twitter has been a major distraction for the 51-year-old CEO.