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Elon Musk defends Tesla buyout tweets in civil court case

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Elon Musk took to the witness box on Friday to defend a 2018 tweet that claimed he financed taking Tesla private in a deal that never came close to happening.

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His tweet resulted in a $40 million (£32 million) settlement with securities regulators. It also led to a class-action lawsuit alleging she misled investors, forcing her to testify under oath Friday for about half an hour in front of a nine-person jury and a full room of media and other spectators. Took him to court.

The trial was then adjourned for the weekend and Mr Musk was asked to return on Monday to answer further questions.

In his initial appearance, Mr Musk defended his prolific tweeting as “the most democratic way” to deliver information, while acknowledging the constraints of Twitter’s 240-character limit make it difficult to make everything as clear as possible Could

“I think you may be absolutely truthful (on Twitter),” Mr Musk insisted. “But can you be broad? Of course not.”

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Mr Musk’s latest headache stems from the inherent brevity of Twitter, a service he has been running since completing its $44bn (£36bn) purchase in October.

The trial hinges on the question of whether a pair of tweets posted by Mr. Musk on August 7, 2018, harmed Tesla shareholders during a 10-day period in which Mr. Musk acknowledged the purchase he had envisioned , she was not going to be.

In the first of those two 2018 tweets, Musk said funding was “secured” for the $72bn (£58bn) buyout of Tesla at a time when the electric automaker was still struggling with production problems and was worth . Much less than now. Mr Musk posted another tweet a few hours later that suggested a deal was imminent.

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After it became clear that the money was not there to take Tesla private, Mr. Musk stepped down as Tesla chairman while remaining CEO as part of the Securities and Exchange Commission settlement without admitting any wrongdoing .

The billionaire arrived in court wearing a dark suit and tie on the third day of a civil trial in San Francisco after his attorney tried unsuccessfully to move to Texas, where Tesla is headquartered, on the grounds that media coverage of his Twitter acquisition would affect the jury pool. was tarnished.

The jury, assembled earlier this week, focused on Mr Musk while he answered questions from Nicolas Porritt, the lawyer representing Tesla shareholders.

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At one point, Mr Musk asked Mr Porritt if he would speak closer to the microphone so he could hear him better. At other times, Mr. Musk craned his neck as he looked around the courtroom.

Mr Musk, 51, said he cares “greatly” about investors and has also railed against short sellers who make investments that reward them when the company’s share price falls. He called short selling an “evil” practice that should be outlawed, calling those who profit from it “a bunch of sharks”.

When shown communications from Tesla investors urging him to reduce or stop his Twitter habit before the 2018 buyout tweet, Mr Musk said he could not remember all those interactions from years ago , especially since he gets the “Niagara Falls” of emails.

Even before Mr. Musk took the stand, US District Judge Edward Chen declared that gamblers could judge those two tweets as false, leaving him to decide whether Mr. Musk intentionally defrauded investors And whether his statements hurt him.

Mr Musk previously claimed he entered into the SEC settlement under duress and believed he turned down financing for the Tesla purchase during a meeting with representatives of Saudi Arabia’s Public Investment Fund Was.

An expert on corporate buyouts hired by shareholder lawyers to study the events surrounding Mr. Musk’s proposal to take Tesla private spent the bulk of his three hours in the witness box on Friday slamming the plan as a flawed concept. took.

“The proposal was very different,” said Guhan Subramanian, a professor of business and law at Harvard University for more than 20 years. “It was inconsistent. It was confusing.

In a lengthy cross-examination that delayed Mr. Musk’s appearance, a lawyer for Tesla’s board of directors tried to undercut Subramanian’s testimony, pointing out that it was to review certain material related to the August 2018 tweet. Relied on graduate student aid. The lawyer, William Price, also mentioned Subramanian’s $1,900-an-hour (£1,533) fee for compiling his report for the case.

The sheer level of pain it took to make Tesla successful during that 2017, 2018 period was excruciatingElon Musk

The trial over his Tesla tweets comes at a time when Mr Musk is focusing on Twitter while serving as the automaker’s CEO and is deeply involved in SpaceX, the rocket ship company he founded.

Mr Musk’s leadership of Twitter – where he has harassed employees and alienated users and advertisers – has proved unpopular among Tesla’s existing stockholders, who are concerned he is spending less time running the automaker at a time of fierce competition. Huh.

Those concerns contributed to a 65% drop in Tesla’s stock last year, which wiped out more than $700bn (£565bn) in shareholder wealth – $14bn (£11.3bn) in the company’s fortunes among more than The high and low stock prices during the period August 7-17, 2018 are included in the class-action lawsuit.

Tesla’s stock has split twice since then, bringing the $420 purchase price he quoted in his 2018 tweet to now $28 on an adjusted basis. Shares of the company were trading around $133 on Friday, down from the company’s November 2021 split-adjusted peak of $414.50.

After Mr. Musk abandoned the idea of ​​buying Tesla, the company overcame its production problems, resulting in a boom in car sales that sent its stock soaring and Mr. Musk becoming the world’s richest man when until they bought Twitter. Mr Musk fell from the top spot on the wealth list after the stock market reacted.

Asked on Friday about the challenges Tesla faced in 2018, he recalled many sleepless nights at the automaker’s California factory as he tried to keep the company afloat.

“The sheer level of pain it took to make Tesla successful during that 2017, 2018 period was excruciating,” he recalled.

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