Musk tweeted “in a split second” that he would take Tesla private, his lawyer says. “It wasn’t his intention.” An expensive mistake.
In 2018, Tesla boss Elon Musk was in a car on his way to the airport. He read a story in the Financial Times that the Public Investment Fund (PIF), an investment vehicle of Saudi Arabia, had taken a $2 billion stake in Tesla. So he opened Twitter. I am considering taking Tesla private at $420 a share. Funding secured,” he tweeted.
He made the decision to send that tweet in “a split second,” Musk’s lawyer Alex Spiro said in a San Francisco court. There goes a lawsuit against Musk, because Tesla was not delisted. The stock price crashed and investors lost millions. “In his haste, he used the wrong words,” Spiro defended the CEO. “He didn’t mean to tweet that.”
It seems to be the defense of Musk’s lawyers in the case: Musk tweeted impulsively, without thinking too much about the possible consequences. And what he said was not at all what he meant, they believe. ‘Financing secured’, according to his defense, did not mean that the funding was secured. Rather, he thought of “an important handshake” between him and PIF. According to Spiro, it was no more than ‘a consideration’ he made. And considerations are not certain. Everyone knows that.’
Prosecutors do not believe that explanation. They call Musk a liar outright. “Millions of dollars were lost when his lies surfaced,” said attorney Nicholas Porritt. They demand “billions” from Musk to rectify the damage they suffered. “If the CEO of a public company like Tesla lies about his company and harms investors, it is important that he is held accountable for the damage he has caused.”
Musk’s defense will try to show that Musk did have reason to believe that he could take Tesla private with the help of PIF. Text messages and emails between Musk and PIF’s CEO Yasir Al-Rumayyan should prove this.
But there is a hair in the butter between the two. PIF repeatedly pushed back, saying that Musk had been too energetic. Al-Rumayyan has also announced that he will not testify at the trial.
It is expected that Musk himself will speak, possibly as early as Friday. The case will probably be settled in February. But the judge overseeing the case has already had it. He denounced both parties for their many and lengthy remarks and statements. “I have three hundred cases ready,” he said. “I have homicide cases to ponder.”