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Monday, February 6, 2023

Musk, who is on trial, claims he was confident he had Saudi backing to privatize.

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Elon Musk has testified that he believes Saudi investors helped him take Tesla private in 2018. In a trial held Monday in U.S. federal court in San Francisco, California. Musk told investor attorney Nicholas Porritt on July 31, 2018, that the Sovereign of Saudi Arabia is a wealth fund public he invests in. He said he had met with representatives of the fund (PIF). At Tesla’s Fremont, California., facility. Musk said the purchase price was not discussed, but Saudi officials have made it clear they will do whatever is necessary to facilitate the deal. “The PIF wanted to privatize Tesla. The trial will test Musk’s propensity to post sometimes irreverent opinions on his Twitter and whether the world’s second-richest man could be held accountable for crossing the line.

At stake are millions of dollars for shareholders who claim they suffered losses after Musk tweeted on August 7, 2018, that he had “funding secured” to take Tesla private at $420 per share, and that “investor support is confirmed”. Tesla’s stock price surged after Musk’s tweets and later fell as it became clear the buyout would not happen. A jury of nine will decide whether the billionaire artificially inflated Tesla’s share price by touting the buyout’s prospects and if so by how much. The plaintiffs have already cleared high legal hurdles in the rare securities class action, with US Judge Edward Chen ruling last May that Musk’s post was untruthful and reckless.
But in Monday’s testimony, Musk said he believed he could have sold enough shares of his rocket company SpaceX to fund a buyout, and “felt funding was secured” with SpaceX stock alone. Musk was also sued by the Securities and Exchange Commission over his tweets, in which Musk and Tesla settled for a total of $40 million and asked Tesla’s lawyers to pre-screen some of his tweets. .

The SEC said Musk had recently learned of the “importance of higher sums in marijuana culture” and thought his girlfriend would make fun of it, so he dropped the alleged takeover offer from $419 per share. It claimed to have been devalued to $420. Mr. Musk dismissed the idea. “It was chosen because it was his 20% premium to the stock price,” he testified. “The $420 price tag was no joke.”

Mr. Musk testified calmly, in contrast to his occasionally belligerent remarks in previous trials. He began his testimony on Friday, saying Twitter, which he bought in October, is the most democratic way to communicate, but his tweets haven’t always impacted Tesla stock in the way he expected. told the jury. “Just because I tweet something doesn’t mean people will believe it or act on it,” Musk said.

Musk’s lawyer, Alex Spiro, said in his opening remarks last week that he believed Musk had Saudi money, despite his tweet containing “technical inaccuracies.” Instead, he said he was trying to protect “ordinary shareholders” from media leaks by tweeting. Defendants also include current and former Tesla directors, who Spiro said had “genuine” motives in responding to Musk’s plans.

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