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Elon Musk takes witness stand to defend infamous Tesla buyout tweets

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SAN FRANCISCO — Elon Musk took the stand on Friday to defend a tweet from 2018, claiming he arranged a fundraiser to take Tesla private.

As a result of the tweet, $40 million settlement with securities regulators. It also led to a class action lawsuit claiming he deceived investors, dragging him into court on Friday.

The capricious billionaire wore a dark suit and took the stand on the third day of his lawyer’s civil trial in San Francisco. An unsuccessful attempt to move to Texaswhere Tesla is currently headquartered, on the premise that media coverage of his tumultuous Twitter acquisition polluted the jury pool.

A nine-person juror, who met earlier this week, was tasked with determining whether two tweets posted by Musk on Aug. 7, 2018, hurt Tesla shareholders, and that Musk was the one he envisioned. I have come to admit that the buyout failed. It doesn’t happen.

A month later, Musk stepped down as Tesla’s chairman and remained CEO without admitting wrongdoing as part of a settlement with the Securities and Exchange Commission. He has since lashed out at his agency, saying in his Ted Talk last year that the pressure to settle the case was like having a gun pointed at his “child’s head.” .

In the first of these two 2018 tweets, Musk said “Funds have been secured” It would have bought Tesla for $72 billion when the electric car maker was still grappling with production issues and was worth far less than it is today.Musk followed up hours later another tweet It suggested a deal was imminent.

On Friday’s stand, Musk, who bought Twitter for $44 billion last year, downplayed the impact his tweets could have on the company’s stock price.

“It’s hard to say that the stock price is linked to the tweet,” he told jurors. “Just because I tweet about something doesn’t mean people will believe it or act accordingly.”

He said tweets are the “most democratic way” to communicate with investors.

“I care a lot about individual investors,” he said when questioned by shareholder attorney Nicholas Porritt.

But he acknowledged that investors can get more detailed information in traditional company filings with securities regulators.

“I think you can absolutely be honest,” Musk said on Twitter.

Even before Musk stood up, U.S. District Court Judge Edward Chen declared that a jury could consider these two tweets false, asking whether Musk deliberately deceived investors, and whether he It remains to be determined whether the remarks of the Company have incurred losses for investors.

Musk has previously claimed to have entered into a settlement with the SEC under duress and, in meetings with representatives of Saudi Arabia’s Public Investment Fund, said he believed he secured financial backing for the Tesla deal.

The jury found two investors who claimed they lost money betting on Tesla in Mr. Musk’s now infamous Aug. 7, 2018 tweet, as well as Mr. Musk’s hasty suggestion as an expert witness. I have already been contacted by a Harvard professor who testified that he was not confirmed by Practicing management buyouts.

The trial over Tesla’s tweets came at a time when he was eyeing Twitter, which he acquired in October, after he tried to back out of the purchase.

Musk’s leadership on Twitter — where he is hit the staff with alienated users Advertiser — has proven unpopular among Tesla’s current shareholders, who worry he’s spending less and less time steering the automaker in a time of heightened competition. Those concerns contributed to a 65% drop in Tesla’s stock last year, wiping out more than $700 billion in shareholder wealth. That’s far more than the volatility in his $14 billion fortune that occurred between the company’s stock highs and lows on Aug. 7-17. , the 2018 period covered by the class action lawsuit.

Tesla’s stock price has split twice since then, with the $420 acquisition price quoted in a 2018 tweet equating to $28 on an adjusted basis. The company’s shares traded at about $133 on Friday, down from its November 2021 split-adjusted peak of $414.50.

After Musk dropped the idea of ​​buying Tesla, the company overcame production problems, resulting in a rapid rise in car sales, a sharp rise in stock prices, and until Musk acquired Twitter, Musk became the world’s most profitable company. became a wealthy person. Musk has since fallen from the top of the wealth list. stock marketA backlash to his handling of Twitter.

Musk’s attorney told jurors in his opening statement that while his tweet was hasty and contained technical errors, it accurately demonstrated that Musk was sincere in keeping Tesla private. said he told me. Musk claims the short-term plan to take Tesla private has been solid based on discussions with the Saudi sovereign’s wealth fund.

The trial comes at a time when Musk’s fortune is declining from its November 2021 peak of $340 billion. Musk became the first person in history to lose more than his $200 billion, all the while spending his $44 billion to acquire his Twitter Inc. The world’s richest man, Tesla’s shares have plummeted 33% since December 1, as electric car makers face increased competition and a looming recession.

Musk is no stranger to courtroom battles, earning him the nickname “Teflon Elon” for his ability to escape unscathed. He ran for and won trials in Los Angeles in 2019 and in Delaware in 2021. He also testified in November in a Delaware investor lawsuit over a $55 billion Tesla payment package, which has yet to be decided.

Includes Bloomberg News material

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