- Elon musk has been exonerated of wrongdoing after his tweet.
- He might have been sentenced to pay billions of dollars in damages.
- The nine jurors took less than two hours to decide.
Elon Musk, the founder of Tesla, has been exonerated of wrongdoing after tweeting that he had “funding secured” to take the electric carmaker private.
Mr. Musk was the target of a class-action lawsuit filed on behalf of Tesla shareholders who claimed he misled them with his August 2018 posts.
The anticipated $72 billion (£60 billion) purchase never happened.
If a jury in San Francisco judged Mr. Musk guilty, he might have been sentenced to pay billions of dollars in damages.
On Friday afternoon, the nine jurors took less than two hours to decide.
Mr. Musk, who had requested that the trial be transferred to Texas, where Tesla is based, claiming that he would not be able to have a fair problem in San Francisco, applauded the conclusion.
Taking to Twitter, the social media platform he bought for $44bn last October, he posted: “Thank goodness, the wisdom of the people has prevailed!
“I am deeply appreciative of the jury’s unanimous finding of innocence in the Tesla 420 take-private case.”
Mr. Musk’s tweet on August 7, 2018
It was essential to the lawsuit: “At $420, I’m thinking about going private with Tesla. Funding secured.”
The plaintiffs also said Mr. Musk had misrepresented when he tweeted later in the day that “investor support is confirmed”.
The stock price rose following the tweets but plummeted within days when it became evident that the deal would not be completed.
According to an analyst engaged by the shareholders, investor losses might reach $12 billion.
The US Securities and Exchange Commission (SEC) filed a lawsuit against Mr. Musk for his tweets, accusing him of misleading investors. Mr. Musk agreed to step down as Tesla’s board chairman in exchange for $20 million.
During the three-week trial, Mr. Musk, who also runs SpaceX and Twitter, claimed he received a verbal commitment for sale from Saudi Arabia’s national wealth fund.
During his nearly nine hours on the witness stand, the world’s second-richest man said: “Just because I tweet something does not mean people believe it or will act accordingly.”
Shareholders had argued that “funding secured” suggested more than a verbal agreement.
Just a ‘bad tweet’?
Although Tesla’s stock price increased following the tweet, Mr. Musk questioned if his tweets had any effect on Tesla’s stock price.
“At one point, I tweeted that I thought the stock price was too high in my perspective… and it went higher, which is paradoxical,” he claimed, suggesting that the influence his tweets have on the stock price is unpredictable.
Mr. Musk stated that he eventually abandoned his proposal to take Tesla private after discussions with smaller investors led him to conclude that they preferred the company remain publicly traded.
He was not in court when the judgment was read, although he was present during closing arguments earlier that day when two portraits of him were drawn.
Nicholas Porritt, a lawyer for Tesla shareholders, said: “Our society is based on rules. We need rules to save us from anarchy. Rules should apply to Elon Musk like everyone else.”
Mr. Musk’s attorney, Alex Spiro, said: “Just because it’s a bad tweet doesn’t make it a fraud.”
Mr. Porritt stated following the decision, “We are dissatisfied with the verdict and are evaluating the next steps.”
Mr. Musk was mainly composed during his evidence, albeit he appeared irritated at points by the line of questions.
There were also lighter moments. Elon Musk changed his Twitter identity to “Mr. Tweet” because a lawyer representing shareholders unintentionally referred to him as such.
Several Tesla directors testified as well, including James Murdoch, Rupert Murdoch’s son. They said that Mr. Musk did not require the Tesla board of directors to examine buyout tweets.
Securities fraud lawyer Reed Kathrein termed the tweet about taking Tesla private “as concrete a statement of taking a company private as there can be”, and said the not-guilty finding was “a disservice to investors and the securities laws”.
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