Elon Musk testified that Saudi Arabia’s sovereign wealth fund “unequivocally” wanted to take Tesla Inc. private in 2018, a core element of his defense to claims that his tweets about the take-private plan misled shareholders.
(Bloomberg) — Elon Musk testified that Saudi Arabia’s sovereign wealth fund “unequivocally” wanted to take Tesla Inc. private in 2018, a core element of his defense to claims that his tweets about the take-private plan misled shareholders.
The shareholders contend in a class-action lawsuit that the tweets were lies that cost them big losses from wild stock price swings over a 10-day period before the plan was abandoned.
As he resumed testifying Monday after a brief appearance on the witness stand Friday, Musk told jurors that he had discussions with the Saudi Public Investment Fund about the transaction. He said the amount required for the fund was “potentially” less than $10 billion. Court filings indicate that Musk himself owned about 19% of Tesla at the time. The billionaire would have needed more than 50% to take the company private.
“The thing that was absolutely unequivocal is that they were absolutely supportive of taking Tesla private,” Musk said in San Francisco federal court. “Unequivocal, without hesitation.” The PIF’s governor, Yasir Al-Rumayyan, had checked with Saudi Arabia’s Crown Prince, Musk said. “I took that to mean it was a done deal.”
The trial requires jurors to delve into Musk’s state of mind when he tweeted on Aug. 7, 2018, that he had “funding secured” to take Tesla private at $420-a-share and added that “investor support is confirmed.”
Nicholas Porritt, a lawyer for the investors, prodded Musk with questions about why there was nothing in writing from the Saudis and no details on the specific amount that the PIF would pony up.
“That’s not really how they do business,” Musk said. “If they say they’re going to do something they do. A signed document is neither here nor there.”
Read More: An Acerbic Musk Risks Losing Billions If He Takes Lawyers’ Bait
Musk disclosed when he first arrived in court that he had a bad night’s sleep, and he seemed to grow weary by his second hour on the stand, speaking in halting sentences as Porritt sharpened his questions to try to show that the take-private plan was lacking fundamental elements. At least once the judge warned Musk he had not answered the question he was asked.
There were also moments of levity, like when Musk revealed that he himself uses the term “infamous” to describe the tweets at issue.
At another point, Porritt asked Musk whether the reference in the tweet to $420-a-share was really a joke about marijuana culture that he thought would amuse his girlfriend at the time.
“There is some karma around 420” and there’s a “question whether that is good or bad karma at this point,” Musk said, prompting laughter in the courtroom.
But he said the amount was chosen because it reflected about a 20% premium on Tesla’s stock price.
“I don’t know if she thought it funny or not but the 420 price was not a joke,” he testified, referring to his then-girlfriend.
Musk’s lawyers told the jury during opening statements last week that while his tweets were rushed and contained technical errors, they accurately conveyed that he was sincere about taking Tesla private.
Musk said Monday that his actual language in the tweet — “Considering taking Tesla private” — was not the same as saying “the deal will be done.”
In his testimony Friday, the renowned entrepreneur and prolific Twitter user offered a remarkably modest assessment of his influence on the social media network that he now owns: “Just because I tweet about something doesn’t mean people believe it or will act accordingly.” The testimony showed Musk minimizing his role in the electric car-maker’s surging stock price after he tweeted.
The trial comes as Musk’s wealth has dwindled from a peak of $340 billion in November 2021. He became the first person in history to lose more than $200 billion, all while he spent $44 billion to acquire Twitter Inc. Last month, he was dethroned as the world’s richest person and Tesla’s stock has plummeted 27% since Dec. 1, with the electric-car maker facing increased competition and a looming recession.
Musk is no stranger to courtroom battles – and has been nicknamed “Teflon Elon” for his ability to escape unscathed. He took the stand and prevailed in trials in 2019 in Los Angeles and in 2021 in Delaware. He also testified in November in a Delaware investor case over his $55 billion Tesla pay package — but that one hasn’t been decided yet.
(Updates with moments of levity in courtroom)
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