The trial of Tesla CEO Elon Musk has drawn intense interest from the public, as well as seasoned analysts, because his words have often been considered reckless. But Wednesday’s proceedings in a San Francisco court room exposed another side to Musk – that of an shrewd businessman who was able to get critical investment for his company. Much of the evidence presented focused on a tweet from 2018 in which Musk claimed Tesla had secured funding to take the company private at a potential value of $420 per share. The tweet immediately caused Tesla’s stock price to surge and raised concerns among shareholders who sold their shares after hearing about the purported funding source. However, during Wednesday’s proceedings, it was revealed that no such deal existed and that Musk had merely made up the $420 figure based on his own speculation. Although he is still facing allegations of fraud, this testimony suggests that Musk is not simply carelessly putting words together but instead is adept at setting expectations with calculated spin tactics intended to reap rewards for himself and his investors
The outcome of the trial will hinge on whether or not jurors believe that Musk’s intent when he tweeted “funding secured” was true or a slip of the hand. If they find that his intent was truly to take Tesla private, then he would be found not guilty. However, if they believe that his tweet was a mistake and that he never actually intended to take the company private, then he could be held liable for investors’ losses.
Had Musk not tweeted about the funding, his shares may have been worth less, as some investors may have believed the deal was not as serious. But by making the news public and inflaming expectations, Musk’s tweetslikely increased Tesla’s share price.Based on these facts, if it is found that Musk knowingly tweeted false information with the intent of artificially inflating Tesla’s stock price by $700 million or more, then he could be guilty of a securities fraud offense.
The lead plaintiff in the SEC vs. Elon Musk case, Glen Littleton, stated on Wednesday that he did take Musk at his word and ended up selling off a significant amount of Tesla stock between 90% to 95%, fearing financial ruin. This ultimately led to a large loss for Littleton as the stock price plummeted after news of the SEC lawsuit broke.
Littleton testified that he moved out of his childhood bedroom in order to save money, but could not afford to stay in on his own. He told jurors that he relied on family and friends for lodging and said it was difficult being so far away from home
The lawyers for Michael Jackson argue that he lost a total of $3.5 million as a result of his prosecution. This loss was allegedly caused by the stress and trauma of the trial, increased medical costs, and damage done to
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
Tesla’s stock price has surged in the past few weeks, reaching a value of $420 on Tuesday evening. Many people are wondering if Tesla is worth taking private at this valuation. According to Bloomberg, Tesla has secured funding for the takeover and believes that the stock
In the current Model 3, Tesla only manufactures 5,000 cars a day despite promising to produce 500,000 per month by July of this year. Tesla’s own Twitter account has been
Musk’s reputation at stake
If Elon Musk is found guilty of tweeting fraudulent information, he could lose a significant amount of money. However, if the jury finds that Musk knowingly tweeted the false information with intent to deceive, his already shaky reputation could be in jeopardy.
In a recent interview with Investors, the star executive said he was sorry for his Twitter dramas and that he would be selling Tesla stock to pay for Twitter business. Some investors say this might be part of the reason Tesla’s stock price dropped 65% in 2022.
A Tesla spokesperson said in a statement: “Tesla welcomes this potential opportunity to have the court handle this matter in a more appropriate location. Tesla has always believed that Mr. Musk could be fairly tried in Texas where he resides and continues to lead the company.” The trial is scheduled to take place in Dallas on January 17th.
Judge Chen’s decision to reject Musk’s bid was a victory for the shareholders’ lawyers, who argued that Musk made his bed by betting on Tesla shares and should now be held accountable for his actions. The ruling sets a precedent for future lawsuits against CEOs who violate shareholder rights, and could deter other reckless corporate gambles.
“Funding secured.”
Tesla’s share price shifted about $14 billion in the 10-day period after Elon Musk made the tweet about taking Tesla private. This caused a lot of speculation and concern among investors, but it seems that Musk was just trying to make a joke. The stock has since dropped back to its original value, so it’s unclear whether this tweet had any real consequences.
Since his initial tweet, questions have arisen as to whether or not Tesla actually secured funding for a take-private deal and if the process was simply rushed to meet a deadline. However, in a blog post on August 7th, Musk backpedaled somewhat and said that based on several meetings with the Saudi Arabian sovereign wealth fund, he truly believed a deal was secured and all that was needed was to get the process moving. It is still unclear how this plan fell apart so quickly and it remains to be seen what exactly happened during these discussions.
When news broke that the Saudi’s Public Investment Fund was not going to be providing funding for Tesla’s $2 billion electric car project, Elon Musk took to Twitter to voice his displeasure. He accused the governor of the kingdom’s Public Investment Fund of throwing him “under the bus.” However, in September of that same year, Lucid Motors announced that it had secured $1 billion from the Saudi fund. It is possible that this decision cooled Musk’s anger towards Riyadh – or at least he doesn’t mention them anymore on social media.
Tensions between Musk and Tesla’s board boiled over in late August 2018 after the CEO tweeted that he was considering taking Tesla private at $420 per share. His statement caused the stock price to spike, but also raised eyebrows among regulators who were concerned about any potential impacts on the public markets. The SEC opened an investigation into the matter, and that ultimately led to a settlement in which Musk was forced to step down as chair of Tesla’s board and agree not to tweet any material that could impact the company’s stock price.
“False and misleading”
Musk had tweeted that he was considering taking Tesla private at $420 per share and that he had “funding secured.” However, after his tweet was widely published, it became clear that the funding for a potential take-private transaction did not actually exist. This led to SEC investigations and hefty fines from the regulator.
Chen’s testimony may have swayed some jurors to think that Tesla’s share price was impacted by Musk’s statements. However, the outcome of the trial is still up in the air and jurors will have to decide if Musk acted knowingly and if they believe there was damage caused.
Experts say that the evidence shows that Musk’s lawyers are likely to have a difficult time proving their client’s innocence. They argue that his tweet was merely an expression of his excitement about the potential for Tesla going private, and there is not enough evidence to suggest that he actually had any intention of taking the company private.
Musk’s attorneys argued that he made the decision to disclose Tesla’s manufacturing woes in a rushed moment because he didn’t want a leak to happen. They claimed that his motivation was purely self preservation and not out of any motive to help the company.
When Elon Musk Tweeted that he had obtained the funding necessary to take Tesla private, many investors were worried. The Briefing note on Tesla’s website said the market reaction was “limited”. In fact, according to Bloomberg reporters who were in attendance at a meeting following the tweet, Tesla’s stock increased after details of Musk’s plan were revealed. Some analysts have suggested that tweets by corporate officers don’t affect the market, but this case shows otherwise.
The lawyer representing Tesla’s shareholders, Nicholas Porritt, said that the tweets and other messages from Musk and Tesla were all lies which caused ordinary investors to lose millions of dollars. The all-star investor has even filed a lawsuit against Musk, claiming that he fraudulently induced investors to put money into the company by making false claims about its future prospects.
