Court acquitted Elon Musk on charges of speculative tweets
2023.02.04 03:32
Court acquitted Elon Musk on charges of speculative tweets
By Ray Johnson
Budrigannews.com – Friday, a jury in the United States found Tesla (NASDAQ:) When Elon Musk, CEO of Inc., tweeted in 2018 that he had “funding secured” to take the electric car company private, neither he nor his company were responsible for deceiving investors.
The plaintiffs had sought billions of dollars in compensation, and Musk, who frequently expresses his opinions on Twitter, considered the decision crucial.
About two hours after beginning deliberations, the jury returned with a unanimous verdict.
Musk tweeted shortly after the verdict was read that he was “deeply appreciative” of the jury’s decision, despite not being present in court at the time.
He said, “Thank goodness, the people’s wisdom has prevailed.”
“We are disappointed with the verdict and are considering next steps,” said investor lawyer Nicholas Porritt in a statement.
Following the verdict, after-hours trading saw a 1.6% increase in Tesla shares.
Wedbush analyst Dan Ives declared, “A dark chapter has now closed for Musk and Tesla.” Ives added that some Tesla investors feared that if Musk lost, he would have to sell more Tesla stock.
The second-richest person in the world has previously caused problems with the law and regulations by using Twitter, the social media company he bought for $44 billion in October, impulsively at times.
The outcome was described as “astounding” by Minor Myers, a professor of corporate law at the University of Connecticut who had previously deemed the investors’ case strong.
“Has always been thought to be this great bulwark against misstatements and falsehoods,” he stated, referring to the anti-securities fraud law in the United States. He added that Musk himself was likely to “double down” on his communication strategies following the verdict. “This outcome makes you wonder if it is up to the job in modern markets,” he said.
In recent months, Musk’s focus has been split between Tesla, his rocket company SpaceX, and Twitter. Investors in Tesla have expressed concern that running the social media company has consumed too much of his attention.
Shareholders of Tesla alleged that Musk had misled them when he tweeted on August 7, 2018, that he was considering taking the company private at $420 per share—a premium of approximately 23% to the close the day before—and that he had “funding secured.”
When Musk tweeted later that day that “investor support is confirmed,” they claim he lied.
After the tweets, the stock price shot up, but it fell again after August 17, 2018, when it became clear that the buyout would not happen.
During the closing argument, Porritt stated that the billionaire CEO should be held accountable for the tweets because he is not above the law.
He stated:
“This case ultimately is about whether Elon Musk should also be subject to the rules that apply to everyone else.”
Alex Spiro, Musk’s attorney, argued that Musk’s tweet about “funding secured” was “technically inaccurate” and that investors only cared about the fact that Musk was considering a buyout.
He stated, “The entire case is built on bad word choice.” Who cares if the words are bad?
Spiro stated in closing arguments, “Just because it’s a bad tweet doesn’t make it fraud.”
The shareholder-hired economist had estimated losses to investors of up to $12 billion.
Musk testified to the jury that he believed the tweets were true for nearly nine hours during the three-week trial. He claimed to have secured the required funding, which included a verbal commitment from the Public Investment Fund, Saudi Arabia’s sovereign wealth fund. Musk stated that the fund later reversed its commitment.
Musk later testified that he “felt funding was secured” with SpaceX stock alone and believed he could have sold enough shares of his rocket company SpaceX to fund a buyout.
Musk testified that he sent the tweets to level the playing field between small shareholders and large investors who were aware of the deal. However, he acknowledged that he did not have any formal commitments from the Saudi fund or any other potential backers.
After winning a defamation lawsuit against the billionaire in 2019 over his tweet calling a cave explorer a “pedo guy,” the verdict is yet another victory for Musk and his attorney, Spiro.
