Trial for his tweets about Tesla

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While still dealing with the fallout from a company he took private, embattled billionaire Elon Musk now faces a lawsuit over a company he didn’t make. Long before Musk bought Twitter for $44 billion in October, he set his sights on Tesla, the electric car maker where he continues to serve as CEO and from which he derives most of his wealth and fame. Musk claimed in a tweet on August 7, 2018 that he had lined up financing to pay for Tesla’s $72 billion buyout, which he then reinforced with a follow-up statement that made it seem like a deal was imminent. But the buyout never happened, and now Musk will have to explain his actions under oath in federal court in San Francisco. The trial, which begins Tuesday with jury selection, was prompted by a class-action lawsuit on behalf of investors who owned Tesla stock during a 10-day period in August 2018. Musk’s tweets at the time sparked a rally in Tesla shares that ended abruptly a week later, after it became clear he didn’t have the funds for a buyout after all. That led to him abandoning his plan to take the automaker private, which led to a $40 million settlement with U.S. securities regulators that also required him to step down as chairman of the company’s board. Musk has since claimed he entered into the deal under pressure and claimed he believed he had locked down financial backing for the Tesla buyout during meetings with officials from Saudi Arabia’s Public Investment Fund. The outcome of the trial could hinge on the jury’s interpretation of Musk’s motives for the tweets, which US District Judge Edward Chen has already ruled to be false. Chen dealt Musk another setback on Friday when he rejected Musk’s attempt to take the case to federal court in Texas, where Tesla is moving its headquarters in 2021. Musk claimed that negative coverage of his purchase on Twitter had poisoned a jury in the San Francisco Bay Area. time to manage the automaker in the period of increased competition. Those concerns have driven Tesla shares down 65% in the past year, wiping out more than $700 billion in shareholder wealth — far more than the $14 billion swing in wealth that occurred between the highs and lows of the company’s stock between Aug. 7 and Aug. 17. . , the 2018 period covered by the class action. The lawsuit is based on the premise that Tesla’s stock wouldn’t have traded in such a wide range if Musk hadn’t given up on the prospect of buying the company for $420 a share. Since then, Tesla stock has split twice, bringing the $420 price to an adjusted $28. Shares closed last week at $122.40, down from a split-adjusted November 2021 peak of $414.50. After Musk abandoned the idea of ​​buying Tesla, the company overcame a production problem that led to rapid growth in car sales, which caused its stock to soar and expected Musk to be the richest man in the world until he bought Twitter. Musk slipped from the top spot on the wealth list after the stock market reacted to his Twitter behavior. The trial is likely to shed light on Musk’s management style, given that the witness list includes some of Tesla’s current and former top executives and board members, including luminaries such as Larry Ellison, the co-founder of Oracle, and James Murdoch, the son of media mogul Rupert Murdoch. The drama could also shed light on Musk’s relationship with his brother Kimball, who is also on the list of potential witnesses to be called during the trial, which runs until February 1.

While still dealing with the fallout from a company he took private, embattled billionaire Elon Musk now faces a lawsuit over a company he didn’t run.

Long before Musk bought Twitter for $44 billion in October, he set his sights on Teslathe electric car maker where he continues to serve as CEO and from which he derives most of his wealth and fame.

Musk said in a tweet on August 7, 2018 that he had lined up financing to pay for Tesla’s $72 billion buyout, which he then reinforced with a follow-up statement that made the deal seem imminent.

But the buyout never happened, and now Musk will have to explain his actions under oath in federal court in San Francisco. The trial, which begins Tuesday with jury selection, was prompted by a class-action lawsuit on behalf of investors who owned Tesla stock during a 10-day period in August 2018.

Musk’s tweets at the time fueled a rally in Tesla’s stock price, which came to an abrupt halt a week after it became clear he didn’t have the funds for a buyout after all. That led to him abandoning his plan to take the automaker private, which led to a $40 million settlement with U.S. securities regulators that also required him to step down as the company’s chairman.

Musk has since claimed he entered into the deal under duress and claimed he believed he had financial backing to buy Tesla during meetings with officials from Saudi Arabia’s Public Investment Fund.

The outcome of the trial could hinge on the jury’s interpretation of Musk’s motives for the tweets, which US District Judge Edward Chen has already ruled to be false.

Chen dealt Musk another setback on Friday when he denied Musk’s request to take the case to federal court in Texas, where Tesla will move its headquarters in 2021. Musk claimed that negative coverage of his purchase on Twitter poisoned a jury in the San Francisco Bay Area.

Musk’s Twitter leadership — where he uprooted staff and alienated users and advertisers — has proven unpopular with current Tesla shareholders, who worry he’s devoting less time to running the automaker in a time of heightened competition. Those concerns have driven Tesla shares down 65% in the past year, wiping out more than $700 billion in shareholder wealth — far more than the $14 billion swing in wealth that occurred between the highs and lows of the company’s stock between Aug. 7 and Aug. 17. . , the 2018 period at issue in the class action.

The lawsuit is based on the premise that Tesla’s stock wouldn’t be trading in such a wide range if Musk hadn’t been dreaming up the prospect of buying the company at $420 a share. Since then, Tesla stock has split twice, bringing the $420 price to an adjusted $28. Shares last week traded at $122.40, down from a split-adjusted November 2021 peak of $414.50.

After Musk abandoned the idea of ​​buying Tesla, the company overcame a manufacturing problem that led to rapid growth in car sales, which sent its stock soaring and made Musk the richest man in the world until he bought Twitter. Musk slipped from the top spot on the wealth list after the stock market reacted to his work with Twitter.

The trial is likely to shed light on Musk’s management style, given that the witness list includes some of Tesla’s current and former top executives and board members, including luminaries such as Larry Ellison, the co-founder of Oracle, and James Murdoch, the son of media mogul Rupert Murdoch. The drama could also shed light on Musk’s relationship with his brother Kimball, who is also on the list of potential witnesses to be called during the trial, which runs until February 1.

Trial for his tweets about Tesla

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