In a trial focusing on whether Mr. Musk’s claims in 2018 about taking the automaker off the stock market caused investors to lose billions of dollars, Elon Musk testified on Monday in federal court that Saudi Arabia’s national wealth fund had “unequivocally intended to take Tesla private.”
The San Francisco judge in charge of the case had already determined that parts of Mr. Musk’s claims about going private were false, including his assertion that he had obtained finance for the transaction.
A plaintiff’s attorney questioned Mr. Musk, the CEO of Tesla, for further information regarding the strategy to take the firm private. In response, Mr. Musk provided testimony concerning the Saudi fund, the Public Investment Fund. According to Mr. Musk, representatives from the Saudi fund had not agreed to a transaction in writing and had not even talked about how much money they would put into it.
Without knowing who else will take part, he claimed that it would be impossible to determine the precise sum. However, he went on to explain that he thought “if they say they’re going in doing something, generally do.”
A public company’s delisting from the stock exchange can be costly and challenging. To take a company private, individuals or investment firms must raise the necessary funds to purchase all or the majority of its equity.
Any sale would have required the Saudi firm, which had acquired a 5% share in Tesla before Mr. Musk revealed his ambitions. While Mr. Musk had long maintained that the Saudi investors were devoted to the agreement, communications revealed in court documents revealed that Mr. Musk had expressed his displeasure with Saudi authorities after news reports suggested they were ambivalent about a deal.
The legal team for Mr. Musk and Tesla attempted in vain to compel witnesses from the fund to testify throughout the trial. The subpoenas were labeled “legally flawed” and “frankly, ridiculous” by the fund’s attorneys this month. On Monday, a request for comment was not immediately answered by a fund representative.
Mr. Musk tweeted on August 7th, 2018, “Am considering taking Tesla private at $420. Funds are in place. Following that, Mr. Musk wrote: “Investor support is confirmed. This is only unpredictable since it is reliant on shareholder approval. After Mr. Musk made those posts, the price of Tesla’s stock increased, but it then dropped as the plan collapsed.
Musk responded, “There is some karma surrounding $420, though I might wonder whether that is good or negative karma at this point,” when asked whether he had priced Tesla at $420 per share as “a joke your girlfriend would love.” The price of $420, Mr. Musk continued, was chosen since it was around 20% more than the share price of Tesla at the time.
Mr. Musk entered the courtroom and proceeded directly to the witness stand while donning a dark suit and a black medical mask. He nodded to the justices as they entered while keeping eye on them.
Investors’ attorneys contend that they chose to participate in Tesla because Mr. Musk claimed to have secured the necessary financing to take the company private. But Mr. Musk’s and Tesla’s attorneys have stated that it’s plausible that investors made choices based on Mr. Musk’s assertion that he was seriously considering taking Tesla private, which, according to his attorneys, was true.
According to legal experts, the majority of businesses and chief executives would have likely reached a settlement in this situation. However, Mr. Musk has frequently demonstrated a willingness to let claims brought against him and Tesla to be tried at trial.
On Friday, Mr. Musk admitted while testifying that Tesla’s Twitter account was a source of crucial information and that it was subject to Securities and Exchange Commission regulations. He refuted claims that the price fluctuations of Tesla’s stock were caused by his social media posts, though. Additionally, he claimed that he couldn’t be as thorough on Twitter as Tesla could be in news releases and S.E.C. filings.
Additionally, Mr. Musk claimed that Tesla’s executives and investors as well as his friends had advised him to take a break from Twitter before he announced about bringing Tesla private.
Regarding his plan to take Tesla private, In 2018, the SEC and Mr. Musk voted a settlement. They made SEC fine settlements., and Mr. Musk consented to step down as Tesla’s chairman and permit legal counsel to be consulted before publishing certain statements about the business on social media.
Three months after Mr. Musk bought Twitter, the trial began. Since then, he has let go of the majority of the company’s staff, altered the platform’s content policies, and reinstated users who had been expelled or suspended.