Elon Musk plays down impact of tweets in Tesla trial

EV company CEO takes stand in securities fraud trial over 2018 tweet that said he was taking company private

Tesla shareholders say Elon Musk lied in a 2018 tweet, costing investors millions. AFP
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Elon Musk, Tesla's chief executive, said on Friday that investors do not always react to his Twitter messages as he expects, as he defended himself in a trial over a 2018 tweet in which he said he had secured funding to take the electric car maker private.

Mr Musk's evidence began with questions about his use of Twitter, the social media platform he bought in October.

He called it the most democratic way to communicate but said his tweets did not always affect Tesla stock the way he expected.

“Just because I tweet something does not mean people believe it or will act accordingly,” Mr Musk told the jury in a federal courtroom in San Francisco, California.

Mr Musk gave evidence for less than 30 minutes before court adjourned until Monday. He was not asked about his 2018 tweet.

He is expected to address why he has insisted he had Saudi investor backing to take Tesla private — which never occurred — 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 that Mr Musk's funding post was untruthful and reckless.

Shareholders alleged that Mr Musk lied when he sent the tweet, costing investors millions.

Mr Musk described the difficulties the company went through around the time he sent the “funding secured” tweet, including bets by short-sellers that the stock would fall.

“A bunch of sharks on Wall Street wanted Tesla to die, very badly,” he said, describing short-sellers, who profit when a stock falls in price.

He said short-sellers plant false stories and said the practice should be made illegal.

Shares of Tesla ended about 5 per cent higher at $133.42 on Friday.

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Earlier, Tesla investor Timothy Fries told the jury that he lost $5,000 buying Tesla stock after Mr Musk sent the tweet, which sparked volatile swings.

Mr Fries said that “funding secured” meant to him that “there had been some vetting, some critical review of those funding sources”.

Mr Musk's lawyer, Alex Spiro, told the jury in his opening statement on Wednesday that the billionaire businessman believed he had financing from Saudi backers and was taking steps to make the deal happen.

Fearing leaks to the media, Mr Musk tried to protect the “everyday shareholder” by sending the tweet, which contained “technical inaccuracies”, Mr Spiro said.

A nine-member jury 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.

Updated: January 21, 2023, 5:30 AM