Tesla CEO Elon Musk said on Tuesday that he expected strong financial backing when he tweeted that he would take ownership of the electrical automobile maker in 2018, but admitted he lacked concrete commitments from potential sponsors.
Musk ended three days on the stand defending himself against allegations that he defrauded investors by tweeting on August 7, 2018 that he had “funds secured” to take Tesla privately.
A trial in federal court in San Francisco is investigating whether the world’s second richest man might be held chargeable for his sometimes impulsive use of Twitter.
Musk told the jury he could have used several sources of funding to take Tesla privately, from existing shareholders equivalent to Oracle co-founder Larry Ellison to a Saudi Arabian sovereign wealth fund or his own fortune.
“Financing was absolutely not a difficulty,” Musk said. “It was quite the other.”
Nevertheless, Musk admitted that he had no binding agreements with investors, leaving the jury to make your mind up whether he had misled shareholders.
![Elon Musk on the stand on Tuesday in this courtroom sketch.](https://nypost.com/wp-content/uploads/sites/2/2023/01/elon-musk-trial-1.jpg?w=1024)
Musk remained generally subdued and calm during his testimony, which began Friday. At the tip of nearly nine hours on the stand, he became more militant by commenting on the class-action law firm that brought the case. His comments were struck from the record by U.S. District Judge Edward Chen.
Tesla shares surged after Musk’s 2018 tweet of $420 a share, which was a premium of about 23% from the day past’s close, only to fall because it became clear that a buyout wouldn’t occur. Investors say they lost hundreds of thousands of dollars consequently.
A nine-member jury will determine whether Tesla’s CEO artificially inflated the corporate’s share price by touting buyout prospects, and if that’s the case, by how much.
Musk testified on Tuesday in response to questions from his lawyer Alex Spiro that his tweet was intended to tell investors of his interest in taking Tesla privately.
Musk said he had already discussed his interest with Tesla’s management and Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, and was concerned that it might leak to the media.
“I did not have bad reasons,” he said. “My intention was to do what was right for the shareholders.”
The Saudi Fund didn’t immediately reply to a Reuters request for comment.
Musk told the jury that after receiving feedback from shareholders, he decided to drop the concept of taking the corporate private.
“After talking to many investors, especially smaller investors, they said they would like a Tesla that remained public, and I felt it was necessary to reply to their wishes,” Musk testified.
The jury received notes and documents from the board meeting days after a tweet in which Goldman Sachs, which worked with Musk on the proposed deal, indicated there can be good enough funds to take over the corporate.
Goldman Sachs didn’t immediately reply to a request for comment.
But when asked by Nicholas Porritt, the investors’ lawyer, Musk said there have been no binding funding deals from any interested party.
Musk repeatedly resisted the “yes” or “no” answers Porritt asked for in reference to discussions concerning the financial liabilities of the Saudi fund, which at one point prompted the judge to help in the cross-examination.
“Was a particular number discussed fairly than concepts?” Chen asked.
“It is not a particular number,” Musk said.
On Monday, Musk said he could have financed the deal by selling his stake in SpaceX, the aerospace company where he can also be the CEO. He also said he believed the funding was pledged by the Saudi representatives of the Public Investment Fund before they pulled out.
The trial is predicted to proceed until next week with testimony from Tesla board members and experts.