Attorneys for Tesla CEO Elon Musk have been described in a federal civil trial over the past three weeks as a businessman so successful that he could have easily secured financing to sell Tesla in 2018. privatization. Antonio Gracias, a former Tesla director, called Mr. Musk “the Michael Jordan of fundraising.”
But investors suing Mr Musk, Tesla and the company’s board say his budding plan to take the company private has had devastating financial consequences for them. One investor, Glen Littleton, called the fallout from the plan “a threat to my livelihood”.
A jury of seven men and two women will begin deliberations on Friday to decide which of the two sides has the stronger case. Mr. Musk appeared in federal court in San Francisco on Friday to make closing arguments in the case. Depending on how the jury decides, Musk and Tesla could be ordered to pay billions of dollars in damages to investors.
Two tweets by Mr. Musk are at the heart of the case. On August 7, 2018, Mr. Musk wrote Tweeted: “I’m considering taking Tesla private at $420. Funding secured.” Then he wrote: “Investor support is confirmed. The only reason this is uncertain is that it depends on shareholder votes.” Tesla’s stock price soared after those posts, and then after the proposal fizzled out in less than three weeks after the plunge.
The judge in the case, Edward M. Chen, has ruled that “funding is secured” and Mr. Musk’s second statement were untrue and that Mr. Musk was reckless in issuing them. But the jury must find that those statements, and not others by Mr. Musk or Tesla, caused investors to lose.
Most companies and executives settle cases like this, legal experts say. But Mr. Musk has often been willing to go to court and go to trial. Winning the case would allow him to defend a dark period in his career.
On Friday, Musk entered the courtroom wearing a dark suit and a black surgical mask, making a beeline for a table next to his lawyer. He waved to a colleague at the gallery, pushing away the microphone, before joking with his lawyer.Mr Musk has release News on Twitter about social media companies sharing ad revenue with creators came less than 10 minutes before entering.he release twice It begins with the court awaiting closing arguments.
Throughout the trial, lawyers for the investors argued that Mr. Musk knew Tesla was far from going private because no individuals or investment funds had committed a specific amount of money to the deal. There is neither a clear structure nor a clear path to regulatory approval for private Tesla.
“This case is about whether the rules that apply to everyone else should apply to Elon Musk,” the investor’s attorney, Nicholas Porritt, said in closing arguments. He added that the stock market “works because there are rules that keep people honest so people can trust the information in the market.”
Mr. Musk and Tesla’s legal team argued that the company’s stock price may have moved because Mr. Musk said he was considering taking Tesla private, a statement they believed to be true. They also argue that capital is actually well-funded, but Mr. Musk does not have an exact figure because he does not know how many shareholders will want to keep holding Tesla shares once Tesla is no longer listed on the stock exchange.
“Funding is not an issue,” said Alex Spiro, an attorney for Mr. Musk and Tesla. He added that the deal fell through because “his motivation was to do the right thing for shareholders.”
Jurors began deliberating the case less than four months after Musk bought Twitter, whose headquarters are half a mile from federal court in San Francisco.
In 2018, Mr. Musk and Tesla filed another lawsuit with the SEC over his plans to take Tesla private. They paid a $40 million fine to the SEC, and Mr. Musk agreed to step down as Tesla’s chairman and allow lawyers to review some statements about Tesla before posting them on social media. Mr. Musk is currently trying to end parts of the agreement in the U.S. Court of Appeals for the Second Circuit.
