Musk expected to take stand as trial resumes over Tesla tweet

Shareholders allege his 2018 tweet that he had ‘funding secured’ to take the electric carmaker private cost them millions in trading losses

Reuters
Published : 20 Jan 2023, 12:41 PM
Updated : 20 Jan 2023, 12:41 PM

Elon Musk, Tesla Inc's chief executive, is likely to be called to testify on Friday in a jury trial over his 2018 tweet that he had "funding secured" to take the electric carmaker private, which shareholders allege cost them millions in trading losses.

The billionaire entrepreneur is listed as the third possible witness on Friday, after a securities expert and a Tesla investor, in the class action trial in San Francisco federal court.

Musk, known for combative testimony, is expected to address why he has insisted he had Saudi investor backing for the deal, which never came together, and whether he knowingly made a materially misleading statement with his tweet.

The case is a rare securities class action trial and the plaintiffs have already cleared high legal hurdles, with US Judge Edward Chen ruling last year Musk's tweet was untruthful and reckless.

Shareholder attorney Nicholas Porritt told the jury in his opening statements on Wednesday that Musk lied when he sent the tweet, costing investors like Glen Littleton, the lead plaintiff.

Musk's attorney, Alex Spiro, countered in his opening statement that Musk believed he had financing from Saudi backers and was taking steps to make the deal happen. Fearing leaks to the media, Musk tried to protect the "everyday shareholder" by sending the tweet, which contained "technical inaccuracies," Spiro said.

A jury of nine will decide whether the tweet artificially inflated Tesla's share price by playing up the status of funding for the deal, and if so, by how much.

The defendants include current and former Tesla directors, whom Spiro said had "pure" motives in their response to Musk's plan.

The trial resumes after a day off on Thursday.

Toufique Imrose Khalidi
Editor-in-Chief and Publisher