Elon Musk returned to federal court to defend himself against a class action lawsuit alleging he misled Tesla shareholders with a tweet about an aborted acquisition the billionaire defiantly claimed he had on Tuesday could pull through if he wanted to.
musk spent about three more hours on the witness stand on his third day of testimony before being pardoned by US District Judge Edward Chen. Musk, 51, is unlikely to be called to the witness stand again during a civil trial that is expected to turn over to a nine-person jury in early February.
Musk, who also owns it Twitter While continuing to run Tesla, he spent much of Tuesday portraying himself while being questioned by his own attorney, Alex Spiro, as an impeccably trusted business leader capable of raising as much cash as he needs to pursue his visions. He fought irritably with a shareholder’s attorney, Nicholas Porritt, who had aroused his ire early in the trial.
At two separate points on Tuesday, under Spiro’s gentle urging, Musk made no bones about his disdain for Porritt with a remark expressing doubts that the attorney was looking out for the best interests of Tesla shareholders. The remarks were quickly rebuked by the judge and erased from the record. “It’s inappropriate,” Chen Musk once admonished.
When challenged by Porritt, Musk deliberately averted his gaze from the attorney and made his statements while looking directly at the jury seated a few yards to his right. In another case, Musk alleged without elaborating that a question from Porritt, in which he wondered if he had ever caused losses to investors, contained “untruths.”
On the other hand, Spiro once incorrectly addressed Musk as “Your Honor” while asking the billionaire how much money he’s made for investors during his career. The slip sparked a moment of hilarity in the San Francisco courtroom, packed with media and other onlookers to listen to Musk, who has risen to even greater fame since initiating his $44 billion Twitter purchase in October.
The current trial depends on whether two tweets Musk posted on August 7, 2018 harmed Tesla shareholders in a 10-day period prior to his admission that the acquisition he was planning would not go through. The statements resulted in Musk and Tesla reaching the $40 million (around Rs.3.26 billion) settlement without admitting wrongdoing.
In the first of the 2018 tweets, Musk explained that funding for a US$72 billion (approx. Rs. 5,86,900) buyout of Tesla – or US$420 (approx. US$420) – The electric car maker was still grappling with production issues and was worth far less than it is now Musk followed a few hours later with another tweet indicating a deal was imminent.
Following those tweets, Musk stated that Tesla would remain public a few weeks later. A month later, Musk and Tesla reached a $40 million settlement with securities regulators who claimed the tweets were misleading.
Musk has previously claimed he entered the settlement under duress and claimed he never wavered in his belief that he had the money for a deal.
Musk spent most of Tuesday convincing the jury that there was nothing sneaky about the two tweets, suggesting he had earmarked the money to privatize Tesla as the electric-car maker struggled with production problems and far was worth less than it is now. The judge has already stated that the jury can find those two tweets false, leaving it up to them to determine whether Musk intentionally misled investors and whether his statements caused them to suffer losses.
While controlled by Spiro, Musk told jurors he only said he was “considering” buying Tesla, but never promised a deal would go through. But Musk said he thinks it’s important to let investors know that Tesla may be ready to end its eight-year run as a public company.
“I didn’t have a bad motive,” Musk said. “My intention was to do the right thing for all shareholders.”
While being grilled by Porritt the day before, Musk was at times combative, outraged and angered. Throughout, Musk has insisted that he secured financial backing for a $72 billion buyout of Tesla in meetings with officials from the Public Investment Fund of Saudi Arabia, though no specific funding amount or price was discussed.
When he was presented with texts and emails showing that a Saudi fund official never pledged the money to buy Tesla outright, Musk claimed they were nothing more than the words of someone who was attempting to buy one to withdraw from earlier commitments from private discussions.
Not long after Porritt resumed his questioning on Tuesday, Musk again scoffed at the notion that his belief that he had the financial backing of Saudi funding wasn’t enough to tweet about a potential Tesla buyout.
“We’re talking about the Kingdom of Saudi Arabia,” Musk testified. “You can buy Tesla multiple times. It wasn’t a large sum of money for her.”
Musk also reiterated previous statements that he could fund a Tesla buyout by sharing some of his holdings SpaceX, a privately held missile ship manufacturer that he also founded. That would be similar to the Twitter purchase that resulted in him selling about $23 billion of his Tesla stock.
It’s something Musk said Tuesday that he didn’t want to do, but that showed he had the wherewithal to match purchases for expensive stores. Musk’s ownership of Twitter has also proved unpopular with Tesla shareholders, who worry he will be distracted as the automaker faces more competition. Tesla stock has lost about a third of its value since Musk took over Twitter.
Despite this downturn, the stock is still worth roughly seven times what it was at the time of Musk’s 2018 tweets, factoring in the two splits that have occurred since then. That opened the door for Musk to remind jurors Tuesday that any investor who would have held Tesla stock in August 2018 would have done “extremely well” if they had just held on to the stock.
“It would have been the best investment in the stock market,” Musk said.
