Musk testifies in fraud trial and points out that not everyone believes what he says

Musk testifies in fraud trial and points out that not everyone believes what he says

Musk testifies in fraud trial and points out that not everyone believes what he says

Elon Musk wearing a suit as he leaves a courtroom during a 2021 trial.
Extend / Tesla CEO Elon Musk leaves the courtroom during the SolarCity trial in Wilmington, Delaware, July 12, 2021.

Getty Pictures | Bloomberg

Elon Musk began testifying today at the jury trial on whether his fake tweets in 2018 about Tesla’s privatization caused investors to lose billions of dollars.

During testimony in federal court in San Francisco, Musk denied that his tweets caused Tesla’s stock price to go up or down. “Just because I tweet something doesn’t mean people believe it or act on it,” Musk said in response to a question from attorney Nicholas Porritt, who represents investors in the class-action lawsuit against Musk.

“It’s hard to say that the stock price is linked to tweets. There were many cases where I thought that if I tweeted something, the stock price would go down,” the Tesla CEO said on the witness stand.

Musk created a tweet in May 2020 in which I wrote, “Tesla’s stock price is too high.” Musk said today that Tesla’s stock price “counter-intuitively” rose after the tweet.

“Although I tweeted that in my opinion the stock price was too high, the stock price went up from there,” Musk said today. “You would think if I tweeted that the stock price was too high it would go down, but it actually went up.”

In fact, Tesla’s stock price dropped 10% the day Musk made that tweet, although the price rose again the following week.

“What I’m trying to say is that the causal relationship clearly doesn’t exist simply because of a tweet,” Musk said in court today.

‘Secured funding’ tweet was fake, judge ruled

The current case is mainly about two tweets made by Musk on August 7, 2018. first said, “I’m thinking of taking Tesla private for $420. Financing secured.” The second tweet said: “Investor support is confirmed. The only reason this is not certain is that it depends on the shareholder vote.”

Musk only testified for less than half an hour today, but will resume testimony on Monday. Because of this, Porritt has yet to question Musk about specific tweets in this case.

Judge Edward Chen has already ruled that the two tweets about privatizing Tesla were false and recklessly made. Before today’s testimony began, Chen reminded the jury that they should assume the tweets were fake.

However, the jury is still out on whether Musk knew they were fake and whether the tweets gave investors a reasonable impression of Tesla’s situation that was different from reality, Chen said. The case is being held in the US District Court for the Northern District of California.

Before Musk began testifying today, jurors heard from two other witnesses called by the plaintiffs — an investor who bought Tesla stock after Musk’s tweets and an expert witness who testified about management takeovers. Musk’s testimony began near the end of the trial day.

During opening remarks on Wednesday, Musk’s attorney Alex Spiro argued that Musk’s fake tweets were just “technical inaccuracies of words” and not relevant to investors. Porritt said investors bought Tesla stock based on Musk’s claim that he had secured funding to take the company private at $420 a share.

“There was no doubt that Elon Musk lied and there was no doubt that Tesla investors were hurt by those lies,” Porritt said.

Musk: “You’re trying to confuse deceptive with short”

Today, Porritt asked Musk if he is aware that his tweets about Tesla are governed by federal securities laws that require them to be accurate, as are press releases and Securities and Exchange Commission filings.

“Yes, but obviously there’s a limit if you have 240 characters to what you can say. Obviously, you can be a lot more detailed in a filing, and everyone on Twitter understands that,” Musk responded. (Twitter’s character limit is 280 characters, but Musk repeatedly said it was 240 characters during his deposition.)

Porritt responded, “There’s no exception to the SEC rules based on limiting characters on Twitter, is there?”

“There isn’t, but I don’t think you can ignore the character limitation and everyone on Twitter is aware of the character limitation,” Musk said. “I think you can be absolutely sincere. But can you be comprehensive? Of course not,” Musk said in response to another question.

Musk accused Porritt of asking misleading questions. “The tweets are real. They’re just short. I think you’re trying to confuse misleading with short. That’s misleading,” Musk said.

“The tweets are information that I think the public should hear,” Musk said as well.

In response to other questions, Musk also discussed short sellers in the context of why he wanted to take Tesla private in 2018. “I believe that short selling should be illegal. It’s a means for bad people on Wall Street to steal money of small investors,” said Musk.

Short sellers “want Tesla dead” and “plant false stories in the media to drive the stock down and do anything in their power to make the company die. It’s bad,” Musk said.

Leave a Reply

Your email address will not be published. Required fields are marked *