Elon Musk returned to the podium in court because of the scandalous tweet about “secured funding”
Matt McFarland, CNN Business
Tesla CEO Elon Musk returned to testify on his third day in a California courtroom on Tuesday as he testified in a class action lawsuit over his controversial “funding secured” tweet from 2018. This will likely be the last day of Musk’s testimony.
Musk, Tesla, and the company’s directors are facing shareholder lawsuit over a tweet in which the CEO said he was thinking about taking Tesla private at $420 a share and “funding has been secured.” Those last two words led Musk to step down as Tesla’s executive chairman and pay millions in legal fees and fines.
Musk’s “funding secured” tweet previously sparked a civil lawsuit from the Securities and Exchange Commission, a federal agency that protects investors. An agreement was reached whereby Musk and Tesla paid fines of $20 million each, and Musk relinquished his chairmanship. Under the agreement, Musk also had to review some of his tweets before posting them.
Musk revealed that he spoke to Saudi Arabia’s sovereign wealth fund executives about the money he would need to take Tesla private. But the funding was far from “secured”. Some shareholders who took action based on his tweet claim they lost money as a result. A nine-member jury must decide whether Musk bears any responsibility for their losses.
Musk said Tuesday that he has never had a problem raising money in his career, despite not securing funding for any Tesla privatization bid.
“It’s not a problem for me to raise money. I did a very good job for investors,” Musk said. “If you do a good job for investors, they give you money.”
He also said that his tweet was not meant to say that Tesla would certainly go private, but that he thought it had the funding it needed if the shareholders chose to do so.
“I didn’t have a bad motive. I thought I was doing the right thing to make sure shareholders are aware of the Take Private offer,” Musk said.
On Monday, Musk revealed that he believes he had a deal with a Saudi fund that claims to have $620 billion worth of assets under management as of early 2022.
Lead plaintiff Glen Littleton said last week that he lost more than 75% of his investment following Musk’s “funding secured” tweet.
Musk argued during the trial that his tweets did not cause Tesla’s stock price to move up or down. He pointed to May 2020 when he tweeted that “Tesla stock price is too high.” The share price fell on the day of his tweet, but recovered and closed the year higher than at the beginning.
The trial is expected to last until February 3.
The-CNN-Wire
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