Elon Musk takes stand in Tesla tweet fraud trial
TimesNowJan 20, 2023Jan 20, 2023
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Musk Takes to Witness Stand, Defends Tesla Buyout Tweets
Last updated Jan 25, 2023
Image credit: cbsFacts
- Elon Musk returned to federal court on Monday to testify in a trial over a 2018 tweet, in which the Tesla CEO claimed to have "funding secured” to take the company private.[1]
- Musk and Tesla are facing a shareholder lawsuit over the tweet, which saw Musk state that he was considering taking Tesla private for $420 a share.[2]
- The deal never came to fruition and the tweet resulted in Musk having to pay a $40M settlement with securities regulators, though he has since claimed that he entered into the Securities and Exchange Commission settlement under duress.[3]
- Musk has also commented that, at the time of his tweets, he believed he had locked up financial backing for a Tesla buyout during meetings with representatives from Saudi Arabia’s Public Investment Fund.[3]
- According to Musk, he had a verbal commitment from Saudi Arabia’s sovereign wealth fund for a buyout that he was certain would proceed, but later failed. Musk also stated that he would have sold off stocks to SpaceX — a satellite and defense contracting company that he is also the CEO of — if it had been required to secure funding to take Tesla private.[4]
- Tesla's CEO stands accused of defrauding investors as, although company shares soared after the Tweet, they later fell when Musk backtracked and stated the plan was no longer going ahead.[5]
Spin
Pro-establishment narrative
Elon Musk's tweets were fraudulent in nature — he intentionally posted untrue information in an attempt to squeeze investors who had bet against the company. Musk acted and continues to act recklessly and needs to be held accountable for his actions, especially in this case as his irresponsibility lost investors their money.
Establishment-critical narrative
Musk's tweet was not fraudulent — he had no ill intent and simply wanted to inform shareholders of his plans at the time. Musk knew he could use his own wealth and involvement in SpaceX to take Tesla private if he needed to. Musk does not deserve to be penalized just because the deal didn't go through.
Nerd narrative
There is a 28% chance that Tesla will become the largest car company in the world (by sales) before 2035, according to the Metaculus prediction community.
