test start with tweets from Tesla boss

AFP, published on Wednesday, January 18, 2023 at 9:11 pm

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 made a splash on August 7, 2018 by saying he wanted to withdraw his group from the stock market by paying $420 per share.

He added that funding was “secured” to carry out this operation and indicated a few days later that he was in talks with the Saudi sovereign wealth 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.

“During this whole process, Mr. Musk did not sell a share. No Tesla executive, no member of the board of directors sold a share. In real cases of fraud, people have an agenda, they want to take advantage This shows that it is not a fraud,” he added.

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 that this is no joke for Glen Littleton (the main plaintiff, editor’s note) or the other investors who lost millions”, asserted Nicholas Porritt.

The lawyer explained to the jury that this case is important because it concerns the respect of the laws that govern the financial markets, the markets on which depend, among others, the funds of pensions and companies insurance

– “Gifted but restrained” –

In addition to Elon Musk, Tesla, as a legal person, and the members of the manufacturer’s board of directors at the material time were also involved in this scheme.

For four and a half years, Elon Musk has not stopped explaining himself with this famous tweet.

Tesla quickly abandoned the idea of ​​delisting, but the American stock market policeman, the SEC, filed a complaint, believing that the boss had not provided proof of its financing.

The regulator ordered Elon Musk to relinquish the chairmanship of Tesla’s board of directors, pay a $20 million fine, and later required that his tweets directly related to Tesla’s business be pre-approved by a competent attorney.

But the intervention of the authorities did not moderate his appetite for provocations on Twitter, his favorite social network, which he bought in October after months of wandering.

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.

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”.