Tesla CEO Elon Musk took the testimony stand for a second day on Monday to try to explain the thought process behind his controversial “funds secured” tweet of 2018, and that’s part of it. I refuted the idea that it was actually a joke.
Musk, Tesla and company directors face shareholder lawsuits over tweets. The billionaire is considering taking Tesla private at $420 a share, saying “funding is secured.” With those two words, the CEO lost his position as Tesla’s executive chairman, pay millions of dollars in fines and legal fees.
Mr. Musk had spoken to senior officials at the Saudi sovereign wealth fund about the money needed to take Tesla private. But it was never “safe”. Musk shared his memory of the incident in testimony Monday.
“My understanding was that they would go ahead with the deal,” Musk said. Musk also claimed he was concerned about news of the deal being leaked to the media, tweeting himself to “make sure all investors are on equal footing.”
during interrogation, mask He denied that he chose the $420 price, which makes sense to marijuana enthusiasts, not as a joke, but as a premium of about 20% of the stock price at the time.
“The 420 price was no joke,” he testified. At another point he said:
On Friday, Musk stood in the stands for about 30 minutes to testify that his tweets won’t make Tesla stock go up or down.he pointed out Events in May 2020 When he tweeted that “Tesla’s stock is too expensive.” His share price fell the day of his tweet but recovered, ending his trading higher than at the beginning of the year.
But lead plaintiff Glenn Littleton testified last week that he lost more than 75% of his investment after Mr. Musk’s “funds secured” tweet.
Musk’s attorney Alex Spiro argued Wednesday that the CEO’s choice of words was wrong, but that it wasn’t a scam. “In haste and recklessness, he tweeted the wrong word choice,” Spiro said. “In his view, funding was not an issue, it was secured. It was secured.” ”
Guhan Subramanian, a law professor at Harvard University and an expert witness for the plaintiffs, argued Friday that Musk’s tweets and proposed deal were examples of terrible corporate governance.
Subramanian said of Musk’s Twitter account, “The lack of guardrails is very annoying. Musk testified on Friday that no one at Tesla reviewed his tweets in 2018 before going public.
Subramanian said there is a much more extensive and rigorous process for a publicly traded company to go private, as Musk has proposed, than what Musk and Tesla have gone through. A special committee is typically formed and engages with consultants and advisors over several months. Boards typically approve announcements that a company has received an offer to go private, but that was not the case with Tesla.
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