Elon Musk takes witness stand in Tesla tweet trial
On his first appearance at the booth, Musk defended his prolific tweeting as “the most democratic way” to spread information.
SAN FRANCISCO — Elon Musk took the stand on Friday to defend a 2018 tweet in which he claimed he prepared funding for Tesla’s privatization in a deal that never came close.
The tweet led to a $40 million settlement with securities regulators. It also led to a class action lawsuit alleging he deceived investors and dragged him into court for about half an hour on Friday to testify before a nine-person jury and a packed room of media and other viewers.
The trial was then adjourned for the weekend and Musk was told to return on Monday to answer more questions.
In his first appearance on the booth, Musk defended his productive tweeting as “the most democratic way” to spread information, while acknowledging that the limitations of Twitter’s 240-character limit can make it difficult to be as clear as possible close.
“I think you can be absolutely honest (on Twitter),” Musk claimed on the stand. “But can you be comprehensive? Of course not.”
Musk’s recent headache stems from the inherent brevity of Twitter, a service he’s run since completing his $44 billion purchase in October.
The trial hinges on whether two tweets Musk posted on August 7, 2018 hurt Tesla shareholders over a 10-day period before Musk admitted the acquisition he was planning would not go through.
In the first of those two tweets from 2018, Musk Statement “Financing secured” for a $72 billion buyout of Tesla at a time when the electric-car maker was still struggling with production and was worth far less than it is now. Musk followed up a few hours later another tweet suggested a deal was imminent.
After it emerged that the money was not in place to take Tesla privately, Musk resigned as Tesla chairman but remained CEO under the Securities and Exchange Commission settlement without admitting wrongdoing.
The impulsive billionaire arrived in court in a dark suit and tie on the third day of the civil trial in San Francisco, as his attorney tried unsuccessfully to move to Texaswhere Tesla is now headquartered, on the premise that media coverage of its turbulent takeover of Twitter tainted the jury.
The jury assembled earlier this week focused intensely on Musk as he answered questions from Nicholas Porritt, an attorney representing Tesla shareholders. At one point, Musk asked Porritt if he would speak closer to the microphone so he could hear him better. At other times, Musk craned his neck while looking around the courtroom.
Musk, 51, said he cares about investors “a lot” and also railed against short sellers making investments that reward them when a company’s share price falls. He called short selling an “evil” practice that should be outlawed and vilified those who profit from it as “a bunch of sharks.”
When he was shown messages from Tesla investors urging him to cut back or quit his Twitter habit prior to the 2018 buyout tweet, Musk said he couldn’t remember all of those interactions from years ago, especially since he’s a “Niagara Falls ‘ from emails.
Even before Musk took the stand, US District Judge Edward Chen said the jury could consider those two tweets to be wrongand left them to decide whether Musk deliberately misled investors and caused them to lose money with his statements.
Musk has previously claimed he entered the SEC settlement under duress and claimed he secured financial backing for a Tesla buyout in meetings with officials from the Saudi Arabia Public Investment Fund.
A corporate buyout expert hired by shareholder advocates to study the events surrounding Musk’s proposal to privatize Tesla spent the better part of his three hours on Friday deriding the plan as a poorly thought-out concept.
“This proposal was an extreme outlier,” said Guhan Subramanian, an economics and law professor at Harvard University for more than 20 years. “He was incoherent. He was illusory.”
In a lengthy cross-examination that delayed Musk’s appearance, an attorney for Tesla’s board of directors attempted to undermine Subramanian’s testimony by suggesting that he had relied on the assistance of graduate students to extract some of the material related to the Review tweets from August 2018. Attorney William Price also noted Subramanian’s hourly fee of $1,900 for preparing his report on the case.
The trial over his Tesla tweets comes at a time when Musk is focused on Twitter while serving as the automaker’s CEO and also remains heavily involved with SpaceX, the rocket ship company he founded.
Musk’s leadership from Twitter – where he has gutted the staff and alienated users and advertisers – has proved unpopular with Tesla’s current shareholders, who are concerned he has spent less time steering the automaker at a time of increasing competition. Those concerns contributed to a 65% drop in Tesla stock over the past year that wiped out more than $700 billion in shareholder wealth — far more than the $14 billion wealth swing that rippled between the high and low stock prices of the company Company from August 7 to 17, 2018 period covered by the class action.
Tesla stock has split twice since then, so the $420 buyout price quoted in its 2018 tweet is now worth $28 on an adjusted basis. The company’s shares traded at around $133.42 on Friday, down from the company’s split-adjusted November 2021 peak of $414.50.
After Musk dropped the idea of a Tesla buyout, the company overcame its manufacturing woes, resulting in a rapid upswing in auto sales that sent its stock skyrocketing and made Musk the richest person on earth until he bought Twitter. Musk fell from the top of the asset list after the stock market backlash over his dealings with Twitter.
When asked Friday about the challenges Tesla faced in 2018, he recalled sleeping many nights at the automaker’s California factory as he tried to keep the company afloat.
“The sheer pain of making Tesla successful in those 2017, 2018 years was excruciating,” he recalled.
https://www.kvue.com/article/news/nation-world/elon-musk-takes-witness-stand-tesla-buyout-tweets/507-4ba51165-9b52-4b15-aa56-ee4d51621a97 Elon Musk takes witness stand in Tesla tweet trial