Elon Musk, Tesla’ chief executive, testified on Tuesday that he intended to tell and never deceive shareholders when he tweeted in 2018 that he had funding lined as much as take the electrical automobile maker private, which shareholders allege was a lie.
Musk is defending against claims he defrauded investors by tweeting on Aug. 7, 2018, that he had “funding secured” to take Tesla private at $420 per share, and that “investor support is confirmed.”
He testified on Tuesday in response to questions from his lawyer Alex Spiro that he intended to share details about his interest in taking Tesla private with all investors after it had already been given to an exclusive few.
Musk said he had already discussed his interest with the Tesla board and Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, and he feared it could leak to the media.
“I had no in poor health motive,” he said. “My intent here was to do the appropriate thing for shareholders.”
Musk said he had already discussed his interest with the Tesla board and Saudi Arabia’s sovereign wealth fund, the Public Investment Fund.REUTERS
He told the jury he decided to drop the concept of taking the corporate private after getting feedback from shareholders.
“After talking to quite a few investors, especially the smaller investors, they said they would favor a Tesla that remained public and I felt it was necessary to be conscious of their wishes,” Musk testified.
Musk returned to the stand on Tuesday after about five hours on Monday and an appearance on Friday.
The trial tests whether the world’s second-richest person may be held responsible for his sometimes rash use of Twitter.
Tesla’s stock surged after Musk’s 2018 tweet in regards to the $420 per share price, which was a premium of about 23% to the prior day’s close, only to fall because it became clear the buyout wouldn’t occur. Investors say they lost tens of millions of dollars because of this.
A jury of nine will resolve whether the Tesla CEO artificially inflated the corporate’s share price by touting the buyout’s prospects, and in that case by how much.
The jury was shown notes and documents from a board meeting in the times after the tweet at which Goldman Sachs, which was working with Musk on the proposed deal, had indicated there was good enough funding to take the corporate private.
“Funding was absolutely not a problem,” Musk testified. “It was quite the other.”
Goldman Sachs didn’t immediately reply to a request for comment.
Nonetheless, during questioning by investors’ attorney Nicholas Porritt, Musk said he didn’t discuss specific amounts of funding with any of the potential investors equivalent to the Saudi fund, Larry Ellison or Silver Lake.
Musk repeatedly resisted the “yes” or “no” response sought by Porritt about discussions over funding, prompting US District Judge Edward Chen at one point to assist with the questioning.
On Monday, Musk said he could have financed the deal by selling his stake in SpaceX, the aerospace company where he can be chief executive officer.