AFP, published on Thursday, January 19, 2023 at 00:34
More than four years after tweeting that he would take Tesla off the stock market, Elon Musk must be held accountable in court by investors who feel offended by his remarks, after facing the wrath of the authorities.
“Elon Musk, (then) CEO of Tesla, lied, and his lies caused people to lose millions of dollars,” said Nicholas Porritt, attorney for the plaintiffs, investors are consolidated into a class action.
On August 10, 2018, they filed a complaint against the business executive for “artificially manipulating Tesla’s stock price to completely destroy investors” who were betting on the price going down.
The fraud trial opened Tuesday in San Francisco with the selection of a nine-person jury, and is expected to last three weeks. Elon Musk himself should take the stand, possibly as early as Friday.
He created a stupor on August 7, 2018 by saying that he wanted to withdraw his group from the Stock Exchange by paying 420 dollars per share, after which the financing was “secured”.
A few days later, he indicated that he was in talks with the Saudi sovereign fund in particular.
According to the defense, Elon Musk has every intention of taking Tesla from the stock market, and there is no doubt about the financing, thanks to the assurances from this fund.
Alexander Spiro, the billionaire’s lawyer, admitted that his client wrote the tweet “in haste” after an article in the Financial Times revealed that the Saudi fund had invested in Tesla.
– “Joke” –
The choice of words was “reckless”, but “it is not a fraud”, hammered the lawyer.
“Throughout this process, Mr. Musk has not sold a share. No Tesla executive, no member of the board of directors has sold a share. In real cases of fraud, people (.. .) want take advantage of it,” he insisted.
The electric car maker’s stock jumped as much as 386.48 dollars after the tweets. On August 16, it dropped to $335.45.
On that date, the New York Times published an interview with Elon Musk “that confirmed the worst rumors”, argued Nicholas Porritt, especially that “no one from the board of directors re-read the tweets that composed from his car on the way to the airport, and the price, $420, is a joke”.
In the United States, the numbers 4 and 20 together are associated with cannabis consumption. When the billionaire made an offer to buy Twitter last spring, he chose a price of $54.20 per share.
“I can tell you this is no joke for investors,” said Nicholas Porritt.
Glen Littleton, the lead plaintiff, told jurors how Elon Musk’s shock announcement nearly “wiped out” all of his investments.
According to his lawyer, this case is also important because it has to do with respecting the laws that govern financial markets – markets that depend in particular on pension funds and insurance companies.
– “Gifted but restrained” –
Tesla quickly abandoned the idea of delisting.
But the American stock market policeman, the SEC, believing that the boss did not provide evidence of his financing, forced him to give up the presidency of the board of directors, to pay a fine of 20 million dollars and the followers demanded that his tweets directly related to Tesla activity are pre-approved by a competent attorney.
“Elon Musk sees this lawsuit as a way to reconsider this SEC decision”, commented Josh White, former economist of the federal agency. “He thinks he did nothing wrong and has a right to say what he wants on Twitter.”
The intervention of the authorities has not moderated his appetite for provocations on his favorite social network, which he bought in October after months of back and forth and under the threat of a lawsuit.
Since then, his controversial decisions at the head of the platform have sparked outrage almost daily, to the point that his lawyers asked a California judge last week to move the trial to Texas, fearing that the jury is biased toward San Francisco.
The motion was denied, but comments from potential jurors, read in court Tuesday, revealed just how divisive the multi-billionaire is.
Some have described him as a “successful pioneer”, others as “arrogant, unpredictable and sometimes irrational” or “generous but crazy”.