Elon Musk returns to federal court to defend himself against a class-action lawsuit alleging he misled Tesla shareholders with a tweet about an aborted buyout that the billionaire vehemently insisted Tuesday he could pull off, if he wanted to.
Musk spent nearly three more hours on the stand during his third day of testimony before being excused by US District Judge Edward Chen. It is unlikely that Musk, 51, will be called back to the witness stand during a civil trial expected to be handed down to a nine-person jury in early February.
Musk, who is also an owner Twitter while continuing to run Tesla, spent much of Tuesday portraying himself, while being questioned by his own lawyer, Alex Spiro, as an unfailingly reliable business leader who was able to raise as much money as he necessary to pursue his visions. He testified that he clashed with a shareholder attorney, Nicholas Porritt, who raised his anger earlier in the trial.
In two separate sessions on Tuesday under Spiro’s gentle prodding, Musk was unequivocal about his disdain for Porritt with a statement expressing doubt that the lawyer was looking out for the best interests of Tesla shareholders. . The comments earned a swift reprimand from the judge and were struck from the record. “This is not appropriate,” Chen at one point warned Musk.
When Porritt challenged him, Musk deliberately shifted his gaze away from the attorney and delivered his explanations while looking directly at the jurors seated a few feet to his right. In another instance, Musk stated, without detail, that a question from Porritt wondering if he had caused investors to suffer losses contained “lies.”
On the flip side, Spiro at one point mistakenly called Musk “your honor” while asking the billionaire how much he had done for investors during his career. The slipup caused a moment of silence in a San Francisco courtroom packed with media and other spectators who had come to hear Musk, who has become increasingly famous since completing his $44 billion purchase of Twitter in October.
The current trial hinges on whether a pair of tweets posted by Musk on August 7, 2018, harmed Tesla shareholders in a 10-day period until he admitted that the purchase he thought not to happen. The statements resulted in Musk and Tesla reaching a $40 million settlement without acknowledging any wrongdoing.
In the first of 2018 tweets, Musk stated “funding secured” for what would be a $72 billion – or $420 per share – purchase of Tesla at a time when the electric automaker is still struggling with production problems and is worth less than it is now. Musk followed up a few hours later with another tweet suggesting a deal was imminent.
Following the tweets, Musk announced that Tesla would remain public a few weeks later. A month after that, Musk and Tesla arrived a $40 million settlement with securities regulators saying the tweets were misleading.
Musk previously disputed that he entered into the settlement under duress and maintained that he did not doubt his belief that he had the money for a deal.
Musk spent much of Tuesday trying to convince jurors that there was nothing fraudulent about two tweets that indicated he was lining up money to take Tesla private as the electric automaker struggled with production problems and more less than now. The judge has already declared that the jury can consider those two tweets which can be falseleaving them to decide whether Musk intentionally misled investors and whether his statements exposed them to losses.
While in charge of Spiro, Musk told jurors that he only stated that he was “considering” a purchase of Tesla but never promised to complete a deal. But, Musk said, he thought it was important to let investors know that Tesla may be ready to end its eight-year run as a public company.
“I have no ulterior motives,” Musk said. “My goal is to do the right thing for all shareholders.”
While there roasted the day before Porritt, Musk is sometimes belligerent, angry and angry. Through it all, Musk insisted that he had locked in financial support for what would be a $72 billion purchase of Tesla in 2018 meetings with representatives from Saudi Arabia’s Public Investment Fund, even though none A certain amount of funding or price is discussed.
When presented with texts and emails indicating that a representative for the Saudi fund never promised money for a full purchase of Tesla, Musk argued that it was nothing more than the words of one who tried to backpedal from a previous promise made in private conversations.
Shortly after Porritt resumed his questioning on Tuesday, Musk once again scoffed at the idea that his belief that he had Saudi financial backing was not enough for him to tweet about a potential Tesla purchase.
“We are talking about the kingdom of Saudi Arabia,” Musk confirmed. “They can buy Tesla many times over. It’s not a huge amount of money for them.”
Musk also repeated earlier testimony that he could finance a Tesla purchase by sharing some of his assets with SpaceX, a private manufacturer of rocket ships that he also started. That would be similar to what he did in buying Twitter, which led him to sell about $23 billion of his Tesla stock.
That’s something Musk said Tuesday he doesn’t want to do, but it shows he has the ability to combine purchases for expensive deals. Musk’s ownership of Twitter has also proven unpopular with Tesla shareholders who worry he will be a distraction as the automaker faces more competition. Tesla stock has lost about a third of its value since Musk took over Twitter.
Despite that decline, the stock is still worth about seven times more than it was at the time of Musk’s 2018 tweets, after adjusting for the two splits that have since occurred. That opened the door for Musk to remind jurors Tuesday that any investor who held Tesla shares in August 2018 would have done “very well,” had they held the stock.
“This would be the best investment in the stock market,” Musk said.
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