Elon Musk testified in court for 5 hours
2023.01.24 02:57
Elon Musk testified in court for 5 hours
By Tiffany Smith
Budrigannews.com – On Monday, Elon Musk told jurors that he was certain that he had secured financial backing from Saudi investors in 2018 in order to take Tesla (NASDAQ:), a company that makes electric cars. Inc private, and he might have been able to finance a buyout with his stake in the rocket company SpaceX.
During roughly five hours of testimony at a trial in San Francisco federal court, the billionaire, who claimed to be exhausted from lack of sleep, spoke quietly and calmly.
He told the jury, without providing any specifics, that “With SpaceX stock alone, I felt funding was secured” for the buyout. He was referring to the aerospace company where he is also CEO.
However, plaintiff investors’ attorney Nicholas Porritt questioned whether he intended to use his SpaceX stake to fund the transaction, which would have increased his Tesla stake. Porritt noted that Musk had previously stated to Tesla employees that he expected his stake in Tesla to remain the same following the transaction.
Musk is responding to allegations that he defrauded investors by tweeting on August 7, 2018, that he had “funding secured” to take Tesla private for $420 per share and that “investor support is confirmed.” Later, Musk said that he decided not to take Tesla private because he didn’t have enough investors’ support and wanted to avoid a long process.
The trial examines whether or not the second-richest person in the world can be held liable for crossing a line, as well as Musk’s propensity to share his sometimes irreverent opinions via Twitter.
After Musk’s tweets in 2018, Tesla’s stock price shot up, but it soon became clear that the buyout would not happen. As a result, investors claim to have lost millions of dollars.
Porritt was informed by Musk that he had a meeting on July 31, 2018, at Tesla’s Fremont, California, factory, with representatives of the Public Investment Fund, the sovereign wealth fund of Saudi Arabia.
He said the Saudi representatives made it clear they would do whatever it took to make a buyout happen, despite the fact that there was no discussion of a takeover price.
Musk claimed that this never happened because the governor of the fund, Yasir Al-Rumayyan, later backed out of his promise to take Tesla private.
According to Musk’s testimony, “I was very upset because he had been unequivocal in his support for taking Tesla private when we met and now he appeared to be backpedaling.”
Al-Rumayyan’s legal representatives did not immediately respond to a request for comment.
Porritt later informed the court that the Saudis’ desire to learn more about Musk’s intentions was reflected in the minutes of their meeting, which showed that written evidence did not support Musk’s claim about the Saudis’ initial intentions.
As he did when he sold a portion of his Tesla stake to help finance his attempt to take Twitter private last year, Musk later testified that he would have sold his stake in SpaceX to fund the go-private deal.
A third day of testimony is anticipated for him on Tuesday.
A nine-member panel will decide whether and by how much the Tesla CEO exaggerated the benefits of the buyout and artificially increased the share price of the company.
According to Musk’s testimony, when he tweeted about the financing, he said, “not that it will happen, but that I am thinking about it,” and it was his “opinion” that funding was secured.
In May of last year, U.S. Judge Edward Chen ruled that Musk’s post was reckless and false.
Due to the tweets, Musk has also been sued by the Securities and Exchange Commission of the United States. The lawsuits resulted in settlements totaling $40 million for Tesla and the requirement that a Tesla lawyer screen some of Musk’s tweets beforehand.
Because he had recently learned about the higher amount’s “significance in marijuana culture” and thought his girlfriend would find it funny, the SEC had alleged that Musk rounded the alleged buyout offer to $420 per share from $419.
Musk denied ever considering that.
He testified, “It was chosen because it was a 20% premium over the stock price.” The price of $420 was not a joke.”
On Friday, he began his testimony, telling the jury that his tweets did not always have the expected effect on Tesla stock, despite the fact that Twitter, which he purchased in October, was the most democratic method of communication.
Musk stated, “People will not act in accordance or believe what I tweet just because I tweeted it.”
In addition, the defendants include current and former Tesla directors, who, according to Musk’s attorney Alex Spiro, acted in response to his plan with “pure” motives.
