In San Francisco, the trial of the head of “Tesla” began. Elon Muskin a fraud case related to a tweet he wrote in 2018, according to accusations from some investors.
At the time, Musk tweeted that he wanted to take Tesla Motors off the stock exchange. The tweet resulted in a $40 million settlement with securities regulators, over which a class action lawsuit was filed once morest him alleging he misled investors.
The owner of the Twitter platform stood up to defend himself before the court and the nine-person jury.
Plaintiffs’ attorney says Elon Musk “lied, and his lies caused people to lose millions of dollars.”
While Musk’s lawyer Alexander Spiro said, “The tweet was written in haste, and the choice of words was not wise, but it is not a fraud.”
He also confirmed that Elon Musk had the intention to remove Tesla from the stock market, and he did not doubt the financing, thanks to assurances from Saudi sovereign wealth fund.
Musk’s interrogation
After Musk dropped the idea of buying TeslaThe company overcame production problems, resulting in a rapid rise in car sales which sent its stock skyrocketing and Musk becoming the richest person in the world until he bought Twitter.
When asked in court on Friday regarding the challenges Tesla faced in 2018, he recalled spending several nights asleep at the automaker’s California plant while trying to keep the company afloat.
“The sheer level of pain to make Tesla successful over the course of 2017 and 2018 was massive,” he recalls.
Operation failed
Gohan Subramanian, a Harvard professor who specializes in this type of transaction, said the billionaire’s proposal was “incomplete, inconsistent and deceptive in some respects”.
One of the plaintiffs, Timothy Fries, said he invested in Tesla the day following the famous tweets.
For him, the message regarding “safe financing” meant that Elon Musk had a “committed partner and was approved for financing.”
But the share price fell in the following days. “I lost $5,000. I hope to recover my losses,” Fries said.
Tesla stock jumped to $386.48 immediately following the tweets. By Aug. 16, it had fallen to $335.45, according to numbers Judge Edward Chen provided to the jury on Tuesday, far from the $420 share price Musk had said.
The trial is scheduled to last three weeks. In an earlier ruling related to this case, the judge found that the famous 2018 tweet might be considered “false and misleading”.
The trial has been adjourned until Monday, when Musk will return to answer more questions.
