Elon Musk and Tesla are not on the hook for losses investors suffered when he posted messages on Twitter in 2018 indicating that he had secured the funding to take Tesla private, a jury found Friday.
The trial in San Francisco federal court stemmed from a series of tweets Musk posted saying that he had the “funding secured” to take Tesla private at $420 a share. He wrote: “Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote.”
After the automaker’s share price spiked after the posts, it plummeted when it became apparent that the deal would not be consummated.
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Investors sued Musk, Tesla and its board of directors alleging that the statements violated securities laws because it misled them into thinking that the deal was imminent.
In a tweet after the verdict was reached, Musk said, “Thank goodness, the wisdom of the people has prevailed! I am deeply appreciative of the jury’s unanimous finding of innocence in the Tesla 420 take-private case.”
Musk’s defense revolved around the argument that he actually planned to take Tesla private in a $70 billion deal with the Saudi Arabian sovereign wealth fund and that Twitter, which he bought in 2022, doesn’t allow users to be “comprehensive.” He also claimed that he had the funds to do so on his own.
“I really have two big assets, which is Tesla and SpaceX. I believe with the SpaceX stock alone, I felt like funding was secured,” he said in one of his three days of testimony. “It’s very important for the jury to know my SpaceX shares alone would have meant that funding was secured.”
Additionally, Musk stressed that his tweets said he was “considering” the plan, “not that it will happen.”
Musk and Tesla in 2018 settled for $20 million a suit from the Securities and Exchange Commission over allegations he lied to investors in the tweets. Under the deal, Musk agreed to step aside as board chairman and have a company lawyer screen his Tesla-related tweets.
The verdict extends the Tesla chief executive’s winning streak in cases that have gone to trial. He has also beat another shareholder lawsuit over Tesla’s $2.6 billion acquisition of SolarCity alleging that he pushed the deal through because he sat on the solar installer company’s board at the time and a defamation lawsuit stemming from when he called a Thai cave rescuer a “pedo guy.”
