Tesla and Elon Musk defeated an investor lawsuit involving “Funding Secured” tweets
The case revolved around whether the mogul misled investors when he tweeted in 2018 that he was going to take Tesla private.
A jury determined on Friday that Elon Musk and Tesla are not responsible for the damages experienced by investors as a result of his tweets in 2018 claiming to have the cash to take Tesla private.
A series of tweets Musk made claiming he had the “money secured” to take Tesla private at $420 per share led to the trial in San Francisco federal court. Investor backing has been verified, he wrote. The only reason this is uncertain is because it depends on a shareholder vote.
After the posts, when it became clear that the deal would not be completed, the automaker’s share price plunged.
A jury determined on Friday that Elon Musk and Tesla are not responsible for the damages experienced by investors as a result of his tweets in 2018 claiming to have the cash to take Tesla private.
A series of tweets Musk made claiming he had the “money secured” to take Tesla private at $420 per share led to the trial in San Francisco federal court. Investor backing has been verified, he wrote. The only reason this is uncertain is because it depends on a shareholder vote.
After the posts, when it became clear that the deal would not be completed, the automaker’s share price plunged.
“I really have two big assets, which is Tesla and SpaceX. I believe with the SpaceX stock alone, I felt like funding was secured,” he said in one of his three days of testimony. “It’s very important for the jury to know my SpaceX shares alone would have meant that funding was secured.”
Additionally, Musk stressed that his tweets said he was “considering” the plan, “not that it will happen.”
Musk and Tesla in 2018 settled for $20 million a suit from the Securities and Exchange Commission over allegations he lied to investors in the tweets. Under the deal, Musk agreed to step aside as board chairman and have a company lawyer screen his Tesla-related tweets.
With this judgement, the Tesla CEO’s winning run in cases that have gone to trial is extended. He has also defeated lawsuits for defamation after calling a Thai cave rescuer a “pedo man” and another shareholder case over Tesla’s $2.6 billion acquisition of SolarCity. The lawsuits claimed that he pushed the merger through because he was on the board of the solar installer firm at the time.