A panel of nine jurors will hear opening arguments on Wednesday in a trial over Elon Musk’s tweets claiming he has “safe funds” to take Tesla private in 2018.
The class action lawsuit was brought by investors who claimed Musk artificially boosted Tesla’s stock price when he wrote on Twitter in August 2018 that he was considering taking the electric car maker for $420 per share and had the financing to do so. . A deal never materialized. Shareholders said the shipment ultimately led to significant financial losses as Tesla’s stock reacted.
Musk denied the post, which sent Tesla shares soaring and ended the day up 11 percent, based on conversations with backers from Saudi Arabia’s Public Investment Fund and what he considered a “handshake” agreement to take the company public. markets.
Opening statements had been expected to begin on Tuesday, but US District Judge Edward Chen in San Francisco acknowledged that jury selection was taking longer than anticipated as both sides in the case debated the neutrality of potential jurors.
Prior to the case, Musk’s lawyers unsuccessfully sought to move the trial from California to Texas, where Tesla is currently based, amid concerns that the jury pool in San Francisco would be tainted by dissatisfaction with Musk’s new management of Twitter, which included cuts. its 7,500-strong workforce is almost half.
During the selection process, one prospective juror has described Musk as “arrogant”, “unpredictable” and “sometimes irrational”. Another said: “I feel a bit off my rocker.” In the end, a jury of nine was selected, seven men and two women.
The trial is scheduled to last about 10 days.
In an earlier ruling, Chen said jurors should consider Musk’s tweets reckless and false. A jury will decide whether he intentionally misled investors and, if so, whether the plaintiff is owed damages.
The extensive list of potential witnesses includes Musk; Tesla board member, chief financial officer and head of investor relations; and Silicon Valley figures such as Silver Lake managing partner Egon Durban, and Oracle co-founder and Musk confidant Larry Ellison.
Musk’s legal team also requested testimony from the head of Saudi Arabia’s sovereign wealth fund, Yasir al-Rumayyan, and several other PIF figures, to testify at the hearing. The PIF has filed a motion to block the request, arguing that the San Francisco court lacks the authority to compel the Saudi executive to appear.
Earlier court filings showed how Musk and al-Rumayyan’s relationship quickly soured over text messages when media reports of go-private discussions began to circulate.
The “safe funds” tweet has proven costly for Musk. He and Tesla each paid $20 million to settle legal actions from the US Securities and Exchange Commission. Musk also had to step down from the automaker, though he remains chief executive.
The legal battle comes amid severe market turmoil for Tesla. The company’s share price has fallen 61.7 percent over the past 12 months, as demand for cars has fallen. Some investors also believe that Musk’s recent purchase of Twitter has hurt the 51-year-old chief executive too much.