A jury found Elon Musk not liable for costing investors millions of dollars after he issued a series of tweets saying he had “secured” funding to take the electric carmaker private.
Friday’s verdict, issued by a nine-person Northern California jury, represents a legal victory for the 51-year-old billionaire, who has seen the value of his Tesla holdings drop by nearly 44% over the past year.
During the trial, Musk took the witness stand to personally defend the tweet, testifying that he believed he had made a deal with Saudi Arabia’s Public Investment Fund in 2018 to buy Tesla, a publicly traded company. Ltd., entered into an agreement to convert the company into a private company. It was the Saudis, he said, who later reneged on the deal.
“I didn’t have any bad motives,” Musk said during nearly eight hours of testimony last month. “My intention was to do the right thing for all shareholders.”
Nicolas Porritt, an attorney representing Tesla shareholders in the case, said no formal agreement was ever reached, and that Musk’s tweets served his own interests rather than those of investors, costing him millions and potentially billions of dollars. The cost came because Tesla’s stock price fluctuated. during tough exams.
Even before the trial, California District Court Judge Edward Chen ruled that the tweets were false and reckless. Separately, Musk and Tesla reached a $40 million settlement with the Securities and Exchange Commission a month after the tweets were posted, although Chen instructed the jury not to consider that development in its deliberations. .
Just three weeks after his online musings, Musk decided to cancel the take-private offer after consulting with shareholders. But Musk, as well as several associates, testified that he had no doubt that Musk could raise the funds to take the company private, if necessary, mostly through tapping shares in his rocket company SpaceX.
By one measure, the decision to keep Tesla public has paid off: Tesla shares are worth more than eight times at the time of Musk’s buyout tweet, after adjusting for two stock splits since then.