He added that the US securities anti-fraud law “has always been considered a great defense against misrepresentations and lies.” “This result makes you wonder whether it’s up to the job in modern markets,” he said, adding that Musk was likely to “double down” on his communications strategy after the verdict.
Musk’s attention has been split in recent months between Tesla, his rocket company SpaceX and now Twitter. Tesla investors have expressed concern that he has become too focused on running the social media company.
‘Bad word choice’
Tesla shareholders claimed that Musk misled them when he tweeted on August 7, 2018, that he was considering taking the company private at $420 per share, up nearly 23% from the day before. There was a premium, and “funding secured”.
They say Musk lied when he tweeted later that day that “investor support has been confirmed.”
The stock price rose after the tweets and then fell again after August 17, 2018, as it became clear that the buyout would not happen.
During the closing arguments Porritt said that the billionaire CEO is not above the law, and should be held accountable for the tweets.
“This case is ultimately about whether the rules that apply to everyone else should also apply to Elon Musk,” he said.
Musk’s attorney Alex Spiro said that Musk’s “money safe” tweet was “technically incorrect”, but that investors only cared that Musk was considering a buyout.
“The whole case is built on bad word choice,” he said. “Who cares about bad word choice?”
“Just because it’s a bad tweet doesn’t make it fraud,” Spiro said during closing arguments.
An economist hired by the shareholders calculated investor losses as high as $12 billion.
During the three-week trial, Musk spent nearly nine hours on the witness stand, telling jurors that he believed the tweets were true. He said he has outlined the necessary financing, including a verbal commitment from Saudi Arabia’s sovereign wealth fund, the Public Investment Fund. Musk said the fund later reneged on its commitment.
Musk later testified that he believed he could sell enough shares of his rocket company SpaceX to make the buyout, and “felt secure funding” with SpaceX stock alone.
Musk testified that he tweeted to put small shareholders on the same level as large investors who knew about the deal. But he acknowledged he lacked formal commitments from the Saudi fund and other potential backers.
He added that his tweets in general don’t always affect Tesla stock the way he expects.
Musk told the jury, “Just because I tweet something doesn’t mean people believe it or will act accordingly.”