Elon Musk cleared of wrongdoing over Tesla financing tweets from 2018

Tesla shareholders claimed tweets had cost them tens of millions of dollars

Graeme Massie
Los Angeles
Saturday 04 February 2023 00:20 GMT
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A California jury has cleared Elon Musk of wrongdoing over 2018 tweets in which he declared that he had the financing to take electric vehicle maker Tesla private.

The billionaire was found not liable by the jury in a San Francisco federal court in a class action securities fraud case brought by Tesla shareholders who alleged that his actions had cost them tens of millions of dollars.

“Thank goodness, the wisdom of the people has prevailed! I am deeply appreciative of the jury’s unanimous finding of innocence in the Tesla 420 take-private case,” Mr Musk quickly tweeted.

Mr Musk had told the jury that his 2018 tweet about taking Tesla private at $420 a share was “not a joke” and had nothing to do with marijuana. The term “420” is commonly used slang for marijuana.

And he testified in court that when he tweeted about taking Tesla private, he believed that he had funding secured after meeting with officials from Saudi Arabia’s Investment Fund.

In the first of the 2018 tweets, Mr Musk stated “funding secured” for what would have been a $72bn buyout of the company at $420 per share. He later tweeted that the deal was imminent.

Mr Musk told the jury that the use of the number was a “coincidence” and represented a 20 per cent premium of Tesla’s share price in August 2018.

When the deal never materialised, Mr Musk and Tesla agreed to a $40m settlement with the Securities and Exchange Commission that allowed him to stay as the company’s CEO but forced him to stand down as company chairman for three years.

“He doesn’t think ahead of time in that rushed moment that this could be interpreted differently and what it means to him,” Mr Musk’s attorney Alex Spiro told the jury earlier on Friday.

“In that moment he didn’t think, ‘how could my words be interpreted differently by you than it means to me.’”

“You have to assess this in context – he’s considering taking it private and the issue is will it actually take it forward,” he added. “No fraud has ever been built on the back of a consideration.”

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