SAN FRANCISCO (AP) — Elon Musk returned to federal court Monday in San Francisco to testify in a class action lawsuit filed by Tesla investors alleging he misled them with a tweet.
In the tweet, which resulted in a $40 million deal With securities regulators, Musk claimed he had lined up the financing to take Tesla private in a deal that never came close to happening.
The trial revolves around the question of whether a pair of tweets Musk posted on August 7, 2018, hurt Tesla shareholders over a 10-day period before Musk admitted the purchase he had envisioned wasn’t going to happen. .
Musk, who said Monday that he “had trouble sleeping last night and unfortunately I’m not at my best,” testified that it was important for jurors to know that he “felt the funding was secured” because of his ownership of “stock of SpaceX only.” ”
“Just like I sold Tesla stock to buy Twitter. … I didn’t want to sell Tesla stock, but I did sell Tesla stock,” he said of the stock sale to make up for a lack of funding from other sources for his $44 billion deal to take Twitter private. Musk sold nearly $23 billion worth of shares in his car company between last April, when he began building a foothold on Twitter, and December.
“Only my SpaceX shares would have meant the funding was secured,” Musk said of the 2018 tweets.
Even before Musk took the stand on Friday, US District Judge Edward Chen had ruled that jurors can find those two tweets false, leaving them to decide whether Musk deliberately misled investors and whether his statements caused them losses.
Musk has previously claimed that he entered into the SEC deal under duress and maintained that he believed he had secured financial backing for a Tesla purchase during meetings with representatives of the Saudi Arabian Public Investment Fund.
In the first of the 2018 tweets, Musk declared “funds secured” for what would have been a $72 billion purchase of Tesla, or $420 a share, at a time when the electric car maker was still grappling with production problems and was worth much less. of what it is now. Musk followed up a few hours later with another tweet suggesting a deal was imminent.
Nicholas Porritt, a lawyer representing Tesla shareholders, asked Musk if he “went with 420 because it was a joke your girlfriend likes.” Musk responded that he believes there is “some karma” around the number 420, which is also a slang reference to marijuana, though he added that he doesn’t know “whether it’s good karma or bad karma right now.”
He then said the number was a “coincidence” and represented a 20% premium to Tesla’s stock price at the time.
After it became apparent that the money was not available to take Tesla private, Musk resigned as Tesla’s chairman and remained as CEO as part of the Securities and Exchange Commission settlement, without admitting to any wrongdoing.