Elon Musk expected to testify in Tesla takeover trial | Elon Musk
Elon Musk is expected to testify as early as Friday in a jury trial over his 2018 Twitter post that he had “funding secured” to take Tesla private, which shareholders allege cost them millions in trading losses.
The class action trial in San Francisco federal court centers on allegations that the Tesla CEO lied when he sent the tweet, costing investors. It resumed on Friday morning with investor Timothy Fries telling the jury how he lost $5,000 buying Tesla stock after Musk sent the tweet at the center of the lawsuit.
Musk, known for combative testimony, is expected to address why he has insisted he had Saudi investor backing for the deal, which never came together, and whether he knowingly made a materially misleading statement with his tweet.
The case is a rare securities class-action trial and the plaintiffs have already cleared high legal hurdles, with the US judge Edward Chen ruling last year that Musk’s post was untruthful and reckless.
Fries told the jury that funding secured meant to him that “there had been some vetting, some critical review of those funding sources”.
Musk’s attorney, Alex Spiro, told the jury in his opening statement on Wednesday that Musk believed he had financing from Saudi backers and was taking steps to make the deal happen. Fearing leaks to the media, Musk tried to protect the “everyday shareholder” by sending the tweet, which contained “technical inaccuracies”, Spiro said.
Guhan Subramanian, a Harvard Law School professor, told the jury that Musk’s behavior in 2018 lacked the hallmarks of traditional corporate dealmaking by tweeting his interest in Tesla without proper financial or legal analysis.
“Compared to the standard template it’s an extreme outlier,” said Subramanian, who called Musk’s approach “unprecedented” and “incoherent”.
A jury of nine will decide whether the tweet artificially inflated Tesla’s share price by playing up the status of funding for the deal, and if so, by how much.
The defendants include current and former Tesla directors, whom Spiro said had “pure” motives in their response to Musk’s plan.
Reuters contributed to this report