(Bloomberg) – Tesla Inc. CEO Elon Musk was heading to the airport in August 2018 when he made a “split-second decision” to tweet that he was “thinking” of taking the company private with “guaranteed financing” because of him. Just reading a news article shows that Saudi Arabia has invested heavily in the electric-car maker.
More Read from Bloomberg
That’s the defense his attorney presented Wednesday to jurors who will decide whether the billionaire bilked Tesla investors out of billions of dollars because they made big bets over a tweet. it seemed wrong.
“He decided in that moment of urgency, imperfect or not, that disclosure was the better way,” Alex Spiro, Musk’s attorney, told jurors in his opening argument in federal court. of San Francisco. “He didn’t want to have a league.”
Musk’s intention to take Tesla together is “arguably unrealistic,” and the messages on Twitter “were not very important to the market,” Spiro said. In fact, he said, when the details of the plan were revealed at a meeting after the tweet, Tesla’s stock price went up.
In stark contrast, a lawyer for Tesla shareholders revealed the August 7, 2018 tweet and follow-up messages from Musk and the company as “lies” that caused the loss of millions of dollars of ordinary investors.
In order for markets to operate normally and fairly, it is “important to hold him, and the company that is holding him, accountable,” said attorney Nicholas Porritt.
The game’s arguments set the stage for a two-week trial that will put Musk’s credibility on the line — and could cost him, Tesla and the company’s billionaires. when they lose.
As the star witness, Musk is expected to testify that his short-term plan to take Tesla private was solidified based on discussions he had with Saudi Arabia’s sovereign wealth fund.
Musk is likely to take the stand when the trial resumes on Friday after jurors heard from two more witnesses, including a Tesla investor who suffered losses he blamed on tweets. and a Harvard professor who is preparing to testify that Musk’s speedy statements on the takeover of the company were misleading. from industry standards.
Porritt argued on Wednesday that Musk did not have an agreement for what would have been a $ 60 billion transaction, and that the first tweet was sent without prior notice to Tesla’s board or any financing. He described how the stock price began to “explode” in response to Musk’s tweet and plummeted the following week after a New York Times story revealed that the strategic plan there is no point.
To show the jury that the tweets caused the damage, Porritt called as his first witness a 71-year-old self-employed businessman and Tesla supporter from Kansas City, Missouri, who testified that the sudden revelation that the company was going undercover forced him to liquidate his money. situation. Glen Littleton, who is also the lead plaintiff in the lawsuit against hundreds of other business owners, lost $3.5 million, according to the court file.
“I can’t stay in,” Littleton told jurors.
Read more: Musk’s Tweeting Could Cost Tesla CEO Billionaire – in Court
But Musk’s team was able to find clues to Littleton’s testimony. He was forced to admit that he started investing in Tesla in 2012 – three years earlier than he testified under questioning from his lawyer. Littleton was also questioned by a lawyer for Musk about the Tesla deals he made after the tweets.
“To this day I still believe in Tesla, I do,” he said.
Spiro devoted his opening argument to making Musk’s actions seem innocuous, telling jurors that “inaccuracies and inaccuracies in tweets don’t hurt the markets. He tried hard.” to take Twitter private.
“It’s not cheating, not even close,” he said.
The CEO’s attorney told jurors that by August 7, 2018, Musk had spoken to Michael Dell, as well as investors at Silver Lake Management and Goldman Sachs Group. “Mr. Musk is doing his homework,” Spiro said, and in those discussions, the structure of a deal to take Tesla private may be unique but financing is not an issue, he said. of Spiro.
The Saudi investment fund has not heard a word of its intention, Spiro said. “He doesn’t have to talk to them,” he said. On the morning of August 7, 2018, Saudi Arabia’s large stake in Tesla was reported in the Financial Times, prompting Musk to tweet in response to that news.
It’s an effort to get the “level of play in the world,” Spiro said, calling the tweets “a wild thought” about what Musk was thinking. “Evaluations are uncertain, everyone knows that.”
(Updates and sample schedule information)
More Read from Bloomberg Businessweek
©2023 Bloomberg LP