Musk testifies in fraud trial, factors out that not everybody believes what he says

Elon Musk wearing a suit while leaving a courthouse during a 2021 trial.
Enlarge / Tesla CEO Elon Musk leaves court docket in the course of the SolarCity trial in Wilmington, Delaware, on July 12, 2021.

Getty Photographs | Bloomberg

Elon Musk started testifying in the present day within the jury trial over whether or not his false tweets in 2018 about taking Tesla non-public brought about buyers to lose billions of {dollars}.

Throughout testimony in a federal courtroom in San Francisco, Musk denied that his tweets trigger Tesla’s inventory value to go up or down. “Simply because I tweet one thing doesn’t imply folks imagine it or will act accordingly,” Musk stated in response to a query from lawyer Nicholas Porritt, who represents buyers within the class-action lawsuit towards Musk.

“It is tough to say that the inventory value is linked to the tweets. There have been many instances the place I believed if I have been to tweet one thing that the inventory value would go down,” the Tesla CEO stated on the witness stand.

Musk introduced up a tweet in Might 2020 by which he wrote, “Tesla inventory value is just too excessive imo.” Musk in the present day stated Tesla’s inventory value “counterintuitively” went up after the tweet.

“Regardless that I tweeted that, for my part, the inventory value was too excessive, the inventory value then went up from that,” Musk stated in the present day. “You’d suppose that if I tweeted the inventory value was too excessive, it could go down, however it really went up.”

In actual fact, Tesla’s stock price dropped 10 percent on the day Musk made that tweet, although the worth did return up the following week.

“What I am attempting to say is the causal relationship is clearly not there merely due to a tweet,” Musk stated in court docket in the present day.

“Funding secured” tweet was false, decide dominated

The present case is primarily about two tweets Musk made on August 7, 2018. The first stated, “Am contemplating taking Tesla non-public at $420. Funding secured.” The second tweet stated, “Investor help is confirmed. Solely motive why this isn’t sure is that it is contingent on a shareholder vote.”

Musk solely testified for lower than a half hour in the present day however will retake the stand on Monday. Due to that, Porritt hasn’t but questioned Musk concerning the particular tweets this case is about.

Choose Edward Chen already dominated that the 2 tweets about taking Tesla non-public have been false and made recklessly. Earlier than in the present day’s testimony started, Chen reminded the jury that they need to assume that the tweets have been false.

Nonetheless, the jury nonetheless should resolve whether or not Musk knew they have been unfaithful and whether or not the tweets gave affordable buyers an impression of Tesla’s state of affairs that was completely different from actuality, Chen stated. The case is being held in US District Court docket for the Northern District of California.

Earlier than Musk began testifying in the present day, jurors heard from two different witnesses referred to as by plaintiffs—an investor who purchased Tesla inventory after Musk’s tweets and an professional witness who testified about administration buyouts. Musk’s testimony started close to the top of the trial day.

Throughout opening statements on Wednesday, Musk’s lawyer Alex Spiro argued that Musk’s false tweets have been simply “technical wordsmith inaccuracies” and weren’t materials to buyers. Porritt stated that buyers purchased Tesla inventory based mostly on Musk’s declare that he’d secured funding to take the corporate non-public at $420 a share.

“There was no dispute that Elon Musk lied, and there was no dispute that Tesla buyers have been damage by these lies,” Porritt stated.

Musk: “You are attempting to conflate deceptive with brief”

At present, Porritt requested Musk if he is conscious that his tweets about Tesla are ruled by federal securities legal guidelines requiring them to be correct, similar to press releases and Securities and Alternate Fee filings.

“Sure, however clearly, there’s a restrict you probably have 240 characters to what you’ll be able to say. You possibly can clearly be much more verbose in a submitting, and everybody on Twitter understands that,” Musk answered. (Twitter’s character restrict is 280 characters, however Musk repeatedly stated it was 240 characters throughout his testimony.)

Porritt responded, “There is no exception in SEC guidelines based mostly on the character limitation on Twitter, is there?”

“There is not, however I feel one can’t ignore the character limitation and everybody on Twitter is conscious of the character limitation,” Musk stated. “I feel you’ll be able to completely be truthful. However are you able to be complete? After all not,” Musk stated in response to a different query.

Musk accused Porritt of asking deceptive questions. “The tweets are truthful. They’re merely brief. I feel you are attempting to conflate deceptive with brief. That is deceptive,” Musk stated.

“The tweets are data that I feel the general public ought to hear,” Musk additionally stated.

In response to different questions, Musk additionally mentioned brief sellers within the context of why he needed to take Tesla non-public in 2018. “I imagine that brief promoting ought to be made unlawful. It’s a means for dangerous folks on Wall Road to steal cash from small buyers,” Musk stated.

Brief sellers “need Tesla to die” and “plant false tales within the media to get the inventory to go down and do something of their energy to make the corporate die. It is evil,” Musk stated.