CEO of Tesla Inc. Elon Musk downplayed the impact of his tweets on the company’s stock price as he defended himself in a trial over his 2018 tweets about taking the electric car maker private.
“It’s hard to say the stock price is linked to the tweet,” he told the jury on Friday in San Francisco Federal court. “Just because I tweet about something, doesn’t mean people believe it or will act on it.”
Investors insisted the tweets were lies that led to huge losses from wild stock price swings in the 10 days before the plan was abandoned. The trial required jurors to probe Musk’s mind when he sent the message, and to determine whether the billionaire’s social media posts actually affected investors’ trading.
When asked by a lawyer for investors if he had to be accurate with his tweets, Musk replied that he was giving “information that the public needs to hear,” but that there was only so much he could post with Twitter’s 240-character limit. post.
Musk appeared on the witness stand in a black suit and tie, removed his mask and smiled briefly at the jury as if to confess.
When questioned, Musk appeared to show a more relatable side by telling the jury that 2018 was a “painful and difficult year.”
“I slept in the factory to make it work,” Musk said. “The level of pain to make Tesla successful in the period 2017-2019 is too much for me and many others.”
He reiterated his mantra that short selling should be illegal, telling jurors that short sellers wanted the stock to go down and wanted Tesla “to die hard.”
Musk’s lawyer told jurors in an opening statement Wednesday that his tweets were rushed and there were technical errors, accurately conveying that he sincerely took Tesla personally. Musk is expected to testify that his short-term plan to take Tesla private is solid based on his discussions with Saudi Arabia’s sovereign wealth fund.
The trial comes as Musk’s wealth has declined from a peak of $340 billion in November 2021. He became the first person in history to lose more than $200 billion, all while he spent $44 billion to acquire Twitter Inc. the richest man in the world and Tesla shares have plummeted 33% since December 1, with the maker of electric cars facing increased competition and a looming recession.
Musk is no stranger to courtroom combat – and has been nicknamed “Teflon Elon” for his ability to escape unscathed. He stood up and won the trial in 2019 in Los Angeles and in 2021 in Delaware. He also testified in November in a Delaware investor’s case over Tesla’s $55 billion pay package — but that has yet to be decided.
The CEO is trying to have the current trial moved from San Francisco, arguing that a jury in that area may be biased against him because of recent Twitter layoffs and “local negativity.” U.S. District Judge Edward Chen denied the request, expressing his belief that a jury would be “unfairly” seated, and swore in the nine-person panel on Tuesday.
The jury has heard from two Tesla investors who claimed Musk’s August 7, 2018, tweet led them to make bets on the stock and eventually take a big loss.
Shareholder Tim Fries, a family man with three children in college, recounted Friday how the tweet prompted him to buy 50 shares for $18,000 the next day.
“Here we have Elon Musk telling the world that he plans to take Tesla private with ‘safe funds,'” Fries said. “Considering the stock price at the time, it seems like a good entry point.”
Fries lost $5,000 when the stock fell. “I joined this lawsuit because I feel guilty; I feel like I lost money because I was wrong,” Fries said. He added that the word “guaranteed funds” for him means that there is “some vetting, some critical review of sources” – which Musk’s lawyer Alex Spiro tried to make appear as another talking point in his cross-examination.
Harvard University professor Guhan Subramanian, called by the plaintiffs as an expert witness, testified about traditional practices and procedures in management buyouts as well as his experience with the purchase of Dell Inc.
He called Musk’s take-personal proposal “incomplete,” “incoherent” and “illusory” in certain ways.
“This is an extreme outlier,” the professor said, adding that the notion that a deal of that size could be put together in 30 days was “impossible.”
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