UNITED STATES: Elon Musk told the jury on Monday that he was confident he had secured financial backing from Saudi investors in 2018 to take his electric vehicle manufacturer Tesla Inc. (TSLA.O) private and that he might have even been able to use his interest in the rocket company SpaceX to help finance a buyout.
The millionaire, who claimed to be tired from lack of sleep, talked quietly and calmly for about five hours during a trial in federal court in San Francisco.
He told a jury, referring to the aerospace business where he also serves as CEO, “With SpaceX stock alone, I felt funding was secured” for the acquisition without providing any other information.
However, the suing investors’ attorney, Nicholas Porritt, cast doubt on whether he had intended to use his SpaceX holding to finance the acquisition, increasing his stake in Tesla.
Porritt emphasised that Elon Musk had stated to Tesla staff at the time that he anticipated his ownership in Tesla to stay comparable following the deal.
In an effort to defend accusations that he defrauded investors, Musk tweeted on August 7, 2018, that he had “funding secured” to take Tesla private for $420 per share and that “investor support is assured.”
Musk added later that he decided not to take Tesla private because several investors were against the idea and he wanted to avoid the drawn-out procedure.
The trial examines Musk’s propensity to post occasionally irreverent opinions on Twitter and explores whether the second-richest person in the world can be held accountable for transgressing a line.
Musk’s 2018 tweets caused Tesla’s stock price to soar, but it later dropped as it became evident that the purchase would not go through. Investors claim that, as a result, they lost millions of dollars.
Porritt was informed by Musk that on July 31, 2018, he met with representatives of the Public Investment Fund of Saudi Arabia at the Tesla factory in Fremont, California.
Although he admitted that a takeover price was not brought up, he claimed that the Saudi representatives made it clear they would go to any lengths to complete a buyout.
Musk claimed it never happened because Yasir Al-Rumayyan, the fund’s governor, later reneged on his promise to take Tesla private.
When we first met, he had been unwavering in his support for taking Tesla private, but now, Musk claimed, he appeared to be changing his mind.
Requests for comment from Al-attorneys Rumayyan’s were not immediately fulfilled.
Later, Porritt testified before the court that the minutes of their discussion demonstrated that the Saudis wanted to know more about what Musk had in mind, contradicting Musk’s claim that written proof supported the Saudis’ initial objectives.
Later in his testimony, Musk stated that he would have sold some of his Tesla stock to help finance the go-private deal, just as he had done the year prior to help finance his attempt to take Twitter private.
He is anticipated to continue with a third day of testimony on Tuesday.
Whether and how much the Tesla CEO artificially raised the firm’s share price by praising the buyout’s prospects will be decided by a jury of nine.
Last May, a U.S. Judge named Edward Chen declared that Musk’s post was careless and untrue.
The U.S. Securities and Exchange Commission has also sued Musk for the tweets, which resulted in settlements totaling $40 million for Musk and Tesla as well as the condition that certain of his tweets be pre-screened by a Tesla attorney.
The SEC said that Musk rounded up the purported buyout offer to $420 per share from $419 because he had just learned of the higher amount’s “importance in marijuana culture” and thought his girlfriend would find it amusing.
Musk vehemently denied thinking that.
He testified, “It was chosen because it was a 20% premium over the stock price.” “The $420 price was not a joke.”
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