Elon Musk testified on Monday that he was sure he had backing from Saudi financiers to take Tesla Inc private in 2018, as he defended against claims he made about his electric car company later that year. Cheated investors by tweeting.
In a lawsuit in San Francisco federal court, Musk told investors attorney Nicolas Porritt that he met with representatives of Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, at Tesla’s Fremont, California, factory on July 31, 2018, and that “PIF clearly wanted to take Tesla private.”
The trial tests Musk’s penchant for taking to Twitter to air his sometimes irreverent views, and when the world’s second-richest man can be held liable for crossing a line.
There are millions of dollars at stake for shareholders, who claim they suffered losses after Musk tweeted in August 2018 that he had “funding secured” to take Tesla private at $420 per share, and that ” Investor support has been confirmed.”
Tesla’s share price jumped after Musk’s tweet and later fell as it became clear that the buyout would not happen.
The nine-member jury will decide whether Musk artificially inflated Tesla’s share price by citing buyout prospects, and if so by how much.
The plaintiffs have already cleared high legal hurdles in the rare securities class action, with US Judge Edward Chen ruling last May that Musk’s post was untrue and reckless.