February 5, 2023

Elon Musk, Tesla’ chief executive, testified on Tuesday that he intended to inform and not deceive shareholders when he tweeted in 2018 that he had funding lined up to take the electric car maker private, which shareholders allege was a lie.

Musk is defending against claims he defrauded investors by tweeting on Aug. 7, 2018, that he had “funding secured” to take Tesla private at $420 per share, and that “investor support is confirmed.”

He testified on Tuesday in response to questions from his lawyer Alex Spiro that he intended to share information about his interest in taking Tesla private with all investors after it had already been given to an exclusive few.

Musk said he had already discussed his interest with the Tesla board and Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, and he feared it would leak to the media.

“I had no ill motive,” he said. “My intent here was to do the right thing for shareholders.”


Tesla CEO Elon Musk is questioned by his attorney Alex Spiro on Tuesday.
REUTERS

He told the jury he decided to drop the idea of taking the company private after getting feedback from shareholders.

“After talking to a number of investors, especially the smaller investors, they said they would prefer a Tesla that remained public and I felt it was important to be responsive to their wishes,” Musk testified.

Musk returned to the stand on Tuesday after about five hours on Monday and an appearance on Friday.

The trial tests whether the world’s second-richest person can be held liable for his sometimes rash use of Twitter.

Tesla’s stock surged after Musk’s 2018 tweet about the $420 per share price, which was a premium of about 23% to the prior day’s close, only to fall as it became clear the buyout would not happen. Investors say they lost millions of dollars as a result.

A jury of nine will decide whether the Tesla CEO artificially inflated the company’s share price by touting the buyout’s prospects, and if so by how much.

The jury was shown notes and documents from a board meeting in the days after the tweet at which Goldman Sachs, which was working with Musk on the proposed deal, had indicated there was more than enough funding to take the company private.

“Funding was absolutely not an issue,” Musk testified. “It was quite the opposite.”

Goldman Sachs did not immediately reply to a request for comment.

However, during questioning by investors’ attorney Nicholas Porritt, Musk said he did not discuss specific amounts of funding with any of the potential investors such as the Saudi fund, Larry Ellison or Silver Lake.

Musk repeatedly resisted the “yes” or “no” response sought by Porritt about discussions over funding, prompting US District Judge Edward Chen at one point to help with the questioning.

On Monday, Musk said he could have financed the deal by selling his stake in SpaceX, the aerospace company where he is also chief executive officer.

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