Elon Musk, Tesla’s chief executive, told a jury on Friday investors don’t at all times react to his Twitter messages as he expected in a trial over his 2018 interest in taking the electrical carmaker private, which shareholders allege cost them thousands and thousands in trading losses.
Musk’s testimony began with questions on his use of Twitter, the social media platform he bought in October. He called it probably the most democratic solution to communicate but said his tweets didn’t at all times affect Tesla stock the best way he expected.
“Simply because I tweet something doesn’t mean people consider it or will act accordingly,” Musk told the jury in San Francisco federal court.
Musk testified for lower than half-hour before the court adjourned until Monday.
He is anticipated to handle why he has insisted he had Saudi investor backing to take Tesla private, which never occurred, and whether he knowingly made a materially misleading statement along with his tweet.
The case is a rare securities class motion trial and the plaintiffs have already cleared high legal hurdles, with US Judge Edward Chen ruling last yr that Musk’s post was untruthful and reckless.
Elon Musk testifies Friday on this courtroom sketch. REUTERS
“Simply because I tweet something doesn’t mean people consider it or will act accordingly,” Musk told the jury in San Francisco federal court.via REUTERS
Shareholders alleged that Musk lied when he sent the tweet, costing investors.
Musk, wearing a dark suit over a white button-down shirt, spoke softly and in a sometimes bemused manner, a contrast to his occasional combative testimony in past trials.
Musk described the difficulties the corporate went through across the time he sent the “funding secured” tweet.
He was asked about messages sent to him by Tesla investor Ron Baron, who urged him to stop using Twitter, but Musk said he didn’t recall all the hundreds of messages he received.
He discussed the challenges the corporate faced on the time, including bets by short-sellers that the stock would fall.
“A bunch of sharks on Wall Street wanted Tesla to die, very badly,” he said.
He said short-sellers plant false stories and said the practice needs to be made illegal.
Shares of Tesla ended about 5% higher at $133.42.
Earlier on Friday, Tesla investor Timothy Fries told the jury on Friday that he lost $5,000 buying Tesla stock after Musk sent the tweet at the middle of the lawsuit.
Fries said that “funding secured” meant to him that “there had been some vetting, some critical review of those funding sources.”
Elon Musk’s attorney said he sent the tweet because of fear of media leaks.
Musk’s attorney, Alex Spiro, told the jury in his opening statement Wednesday that Musk believed he had financing from Saudi backers and was taking steps to make the deal occur. Fearing leaks to the media, Musk tried to guard the “on a regular basis shareholder” by sending the tweet, which contained “technical inaccuracies,” Spiro said.
Guhan Subramanian, a Harvard Law School professor, told the jury that Musk’s behavior in 2018 was “unprecedented” and “incoherent” in structuring a company deal because he went public along with his intent to purchase Tesla without proper financial or legal evaluation.
A jury of nine will determine whether the tweet artificially inflated Tesla’s share price by playing up the status of funding for the deal, and if that’s the case, by how much.
The defendants include current and former Tesla directors, whom Spiro said had “pure” motives of their response to Musk’s plan.