Elon Musk insists his tweet about Tesla’s fraud case was confirmed. Elon Musk had said in court that when he tweeted something contentious, he believed he had enough support to take Tesla private.
The CEO of an electric vehicle manufacturer is facing criminal charges after investors alleged a failed business agreement in 2018 was directly attributable to a tweet he sent.
Mr. Musk claims to have met with a sovereign wealth fund from Saudi Arabia, which signaled their support for a deal.
He said he would have used the proceeds from selling his SpaceX shares.
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It all started when on August 7th, 2018, Mr. Musk tweeted that he had “financing secured” to take Tesla private at $420 (£341) per share and that “investor support is assured.” He has since been accused of fraud.
Shares of Tesla shot up after Musk’s post, only to fall after he announced the proposal was scrapped and received strong pushback.
When the US regulator, the Securities and Exchange Commission (SEC), found out about his tweets, they demanded that he step down as Tesla’s chairman and have them reviewed by an outside group.
As part of a settlement with the SEC, he and Tesla paid a total of $20 million in fines related to allegations of securities fraud.
Mr. Musk disclosed to a San Francisco court on Monday that he had met with representatives of Saudi Arabia’s Public Investment Fund on July 31, 2018.
He said the fund officials had made it apparent they supported a deal, even though they had not discussed a price for taking Tesla private.
Mr. Musk stated that the fund’s governor, Yasir Al-Rumayyan, initially appeared to backtrack on the promise.
When asked about his displeasure, he explained, “I was irritated since he had been clear in his support for taking Tesla private when we met, and now he appeared to be backpedaling.”
Mr. Musk was also asked whether the $420 share price was a reference to marijuana and how he arrived at that number.
In a 2018 SEC filing, Musk said he arrived at the figure by adding 20% to the closing price of a share of Tesla stock on that day. When I did the math, it came out to $419.
According to SEC filings, however, he decided to charge $420 because he had recently learned of the number’s importance in marijuana culture, and he felt his girlfriend “would find it hilarious,” which is “obviously not a great basis to set a price.”
The significance of 4:20 p.m. in American counterculture is often attributed to California teenagers in the 1970s who regularly gathered to consume marijuana and look for a growing spot after school.
Later, thousands of people would assemble annually on April 20 to celebrate marijuana. In the United States, the month comes first, followed by the day. Therefore April 20 would be written as 4/20.
“420 was not chosen because of a joke; it was chosen because there was a 20% premium above the stock price,” Mr. Musk, who has smoked cannabis in public but claimed not to be a frequent user, told the court.
He continued, “There is karma around 420, though I should wonder if it is good or bad karma at this point.”
Musk, who spent $42 billion to acquire Twitter last year, said in court on Friday that he did not believe his tweets had affected Tesla’s share price.
The fact that he tweeted anything didn’t make it accurate or cause people to act on it; he told the jury.
Mr. Musk has also attacked the “evil” short-sellers or investors who wager that a company’s share price would decrease.
The nine-person jury heard him say, “It’s tough to grasp just now just how much abuse Tesla was under by short-sellers who wanted Tesla to die.”
Mr. Musk, who is allegedly “off his rocker,” will continue his testimony on Tuesday. He thought the media attention around the businessman in California would sway the jury’s decision against him, so he tried to have the trial transferred to Texas.
Thousands of employees at the San Francisco-based Twitter, which he took over, were laid off.
Mr. Musk’s attorney, Alex Spiro, has stated, “We do not believe we can obtain a fair trial in this district, period, full stop.”
Mr. Spiro asserted, “The media reports are character attacks.”
As expected, Judge Edward Chen ruled against the motion.
Potential jurors’ reactions to Mr. Musk varied widely during the jury selection. Others used words like “genius” and “clever” to characterize him.
He was “a little off his rocker,” another person remarked.
A female commentator opined, “He’s not a very pleasant person.”
A lot of people are not necessarily likable people…. sometimes I don’t like my husband,” the woman said when the judge asked whether it meant she would not be fair towards him.