Jury clears Elon Musk of wrongdoing for 2018 tweets in which he said he had funding to take Tesla private
SAN FRANCISCO– A jury on Friday decided that Elon Musk did not mislead investors with his 2018 tweets about electric carmaker Tesla.
The nine-juror verdict came after less than two hours of deliberation following a three-week trial and represents a major vindication for Musk.
The lawsuit pitted Tesla investors represented in a class action lawsuit against Musk, CEO of the electric carmaker and the Twitter service he bought for $44 billion a few months ago.
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In 2018, Musk tweeted that he had the funding to take Tesla private even though it turned out he hadn’t secured an ironclad commitment to a failed deal that would have cost between $20 billion and $70 billion. dollars.
Musk’s integrity was at stake during the trial as well as part of a fortune that established him as one of the richest people in the world. He could have been saddled with a bill of billions of dollars in damages if the jury had found him responsible for the 2018 tweets that had already been deemed lies by the judge presiding over the trial.
Earlier Friday, Musk sat stoically in court, as he was both reviled as a wealthy narcissist whose reckless behavior risks ‘anarchy’ and hailed as a visionary looking for the ‘little guy’ to close. the arguments of the trial.
The lawsuit hinged on whether Musk’s 2018 tweets misled Tesla shareholders, pointing them in a direction they said would have cost them billions of dollars. The civil case centered on two tweets Musk posted on August 7, 2018 about a Tesla takeover that never happened.
The first tweet, posted just before boarding his private jet, Musk said he had “secure funding” to take Tesla private. A few hours later, Musk sent another tweet indicating that the deal was imminent.
The tweets sent Twitter shares soaring for a 10-day period covered by the lawsuit before falling back after Musk abandoned a deal in which he never had a firm funding commitment, based on the evidence presented. during the three-week trial.
Musk’s decision to appear for closing arguments — even though his presence was not required — underscored how important the outcome of the trial is to him.
Nicholas Porritt, an attorney for Tesla shareholders, urged jurors to reprimand Musk for his “loose relationship with the truth”.
“Our society is rule-based,” Porritt said. “We need rules to save us from anarchy. Rules must apply to Elon Musk like everyone else.”
Alex Spiro, Musk’s attorney, acknowledged that the 2018 tweets were “technically inaccurate”. But he told jurors, “Just because it’s a bad tweet doesn’t make it a fraud.”
US District Judge Edward Chen, who presided over the trial, ruled last year that Musk’s 2018 tweets were false and asked the jury to view them that way.
For about eight hours on the stand earlier in the trial, Musk insisted he believed he had raised the funds from the Saudi Public Investment Fund to take Tesla private after eight years as a public company. He defended his initial August 2018 tweet as well-intentioned and aimed at ensuring that all Tesla investors know the automaker may be on the verge of ending its run as a public company.
“I had no bad motive,” Musk said. “My intention was to do the right thing for all shareholders.”
Spiro echoed this theme in his closing argument.
“He was trying to include the retail shareholder, the mom and the pop, the little guy, and not take more power for himself,” Spiro said.
Porritt, meanwhile, scoffed at the notion that Musk might have concluded he had a firm commitment after a 45-minute meeting at a Tesla factory on July 31, 2018, with fund governor Yasir al-Rumayyan. of Saudi wealth, since there was no written record.
A text message sent by al-Rumayyan later in August and forming part of the trial evidence also said the Saudi fund was only interested in learning more about Musk’s proposal to take Tesla private at a time when the company was valued at around $60 billion.
“Apparently a $60 billion funding commitment was secured and no one wrote a single word,” Porritt said, while claiming that amount was greater than the combined economic output of Nicaragua, Honduras and the United States. Salvador.
“Elon Musk apparently thinks it’s easier to get billions of dollars in financing than a car loan or a mortgage,” Pollitt added.
Spiro, however, highlighted Musk’s background in helping start and run a roster of businesses that include digital payment pioneer PayPal and rocket maker SpaceX, in addition to Tesla. The Austin, Texas-based automaker is now worth nearly $600 billion, despite its stock price falling sharply last year as Musk’s Twitter purchase would steer it away from Tesla.
Recalling Musk’s roots as a South African immigrant who came to Silicon Valley to build breakthrough tech companies, Spiro described his client “as the kind of person who believes the impossible is possible.”
Porritt put a different spin on Musk’s mindset during his presentation. “For Elon Musk, if he believes it or just thinks about it, it’s true.”
In his closing remarks, Porritt told jurors their decision would come down to their answer to one question: “Do the rules apply to everyone, or can Elon Musk do whatever he wants without suffering the results ?”
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