An attorney for Tesla shareholders who allege Elon Musk misled them when he tweeted that he had been given money to take his electric car company private is expected to make closing arguments before a jury in San Francisco on Friday.
A nine-person jury will decide whether the tweet artificially inflated Tesla’s share price by playing up the financing status of the deal, and if so, by how much.
Investors are demanding billions in damages from Musk, Tesla and several company directors. The trial will test whether Musk, the second richest person in the world, can be held accountable for his sometimes impulsive use of Twitter.
Tesla shareholders have accused Musk of misleading them on August 7, 2018, by tweeting that he was considering taking Tesla private at $420 per share (approximately Rs. 34,300), a 23 percent premium over the last closing price and valuing the company at $72 billion (approximately Rs 5,89,655 crore), and had “funding secured”.
They say Musk lied when he tweeted later that day that “investor support has been confirmed.”
Tesla’s stock price traded higher than before Musk’s tweets for much of the 10-day period covered by the lawsuit, but fell when it became clear that a buyout would not take place.
During the three-week trial, jurors heard testimony from witnesses, including Tesla executives, Musk’s financial advisers, and Musk himself.
Musk testified that funding was not an issue when he sent the tweets. He said he had arranged financing, including a verbal commitment from Saudi Arabia’s sovereign wealth fund, and could have used his stake in SpaceX to fund the deal.
But Musk admitted on the stand that he lacked specific commitments from potential financiers.
The defense team, also expected to deliver closing arguments Friday, has acknowledged that the tweets contain “technical inaccuracies,” but said Musk was focused on ensuring small shareholders had the same information as large investors who knew about the possible buyout.
© Thomson Reuters 2023
