Elon Musk says his SpaceX shares would have financed his plan to take Tesla private

Elon Musk says his SpaceX shares would have financed his plan to take Tesla private

Elon Musk said he could have sold his SpaceX shares to take Tesla private when he took the witness stand again to defend his 2018 “funding secured” tweets in a lawsuit brought by the automaker’s shareholders. According to CNBCMusk proclaimed: “SpaceX shares alone meant ‘secured funding’ by itself. Not that I want to sell SpaceX shares, but I could have, and if you look at the Twitter transaction, that’s what I did. I sold shares. from Tesla to complete the Twitter transaction. And I would have done the same here.” However, he did not say how many of his shares would have to be sold in order to finance the transaction.

Plaintiffs’ lawsuit is based on Musk’s infamous 2018 tweets in which he said he was “considering taking Tesla private at $420.” He even said that he already had “[f]Musk first took the stand in this particular case last week to defend himself against the plaintiffs’ allegations that the tweets he made cost them significant financial losses. Tesla shares temporarily stopped trading after those tweets and remained volatile in the weeks that followed. He said at the time that just because he tweets something “doesn’t mean people believe it or act on it.”

This time, Musk reiterated his earlier claim that he had a deal with the Saudi Arabian Public Investment Fund to take Tesla private. He told the court that the country was “unequivocal” in its support for the transaction, which ultimately fell through. According to Bloomberg, the court discussed his communication and his eventual fight with the governor of the Saudi fund, Yasir Al-Rumayyan, regarding the agreement. A text exchange was reportedly presented to the jury, in which Musk accused Al-Rumayyan of backing out of their handshake agreement. The Saudi official responded that he did not have enough information to be able to commit to the purchase, calling Musk’s public announcement of his discussions “ill-advised.”

The plaintiffs’ attorney also asked Musk what many of us were probably wondering: whether the $420 stock price in his tweets was made as a joke in reference to marijuana. It was apparently no joke, and he chose it “because it reflected a 20 percent premium to Tesla’s stock price.” Musk is expected to testify again on Tuesday, so it’s likely we’ll hear more details about his failed attempt to take Tesla private.

What Bloomberg points out, the judge in this case had already determined that his tweets were “objectively false and reckless.” However, the plaintiffs still have to prove that Musk knew that his tweets were misleading and that his tweets caused them losses in order to win the case. Musk and Tesla previously had to pay the Securities and Exchange Commission $20 million each to settle a separate lawsuit over the same tweets, accusing him of making “false and misleading statements” that could constitute fraud. The CEO said on the stand that he told the SEC about SpaceX and that the plaintiffs’ attorney “knowingly excluded[ed] that of the jurors”.

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