Tesla Inc. CEO Elon Musk resumed testifying Monday in the trial of a securities-fraud lawsuit over his August 2018 tweet about taking the company private. Here are some key takeaways from more than four hours on the stand, and click here for our TOPLive blog:
(Bloomberg) — Tesla Inc. CEO Elon Musk resumed testifying Monday in the trial of a securities-fraud lawsuit over his August 2018 tweet about taking the company private. Here are some key takeaways from more than four hours on the stand, and click here for our TOPLive blog:
- Musk arrived in a black suit like the one he wore during a short appearance on Friday, though he seemed to have less energy. He said he had trouble sleeping last night, and later in the afternoon he said he was having back pain. “Unfortunately, I’m not at my best,” he said.
- Prior to Musk’s testimony, plaintiffs presented a transcript of a conversation between Musk and Saudi investors in 2018 in which he said he didn’t own enough of Tesla to take it private by himself. Musk said he held about 19% at the time, or 25% if he exercised some options, according to the transcript. He needed more than 50% to take the company private.
- Musk now owns 13.42%, according to Bloomberg data.
- Musk maintained throughout his testimony that the Saudi Public Investment Fund “unequivocally” supported his take-private plan, but that it was a handshake agreement with no written commitment. “A signed document is neither here nor there,” he said. “If they say they’re going to do something, they do it.”
- Musk then accused PIF governor Yasir Al-Rumayyan of backpedaling on their arrangement when the Saudi investor demanded more information about the CEO’s plans, after Musk posted his go-private tweet.
- Musk said that he had dinner in 2017 with friend and confidant Larry Ellison — as well as Goldman Sachs’ Dan Dees and SoftBank’s Masayoshi Son — and Ellison was very supportive of going private.
- Similarly, Musk said that he asked Michael Dell whether he regretted taking Dell private, and testified that Dell was “unequivocal” that it was a good idea.
- Musk disputed that his tweets influence Tesla shares and said he didn’t check Tesla’s stock price after he’d sent his tweet or notice that trading had been halted. He said he was busy dealing with production issues on the Tesla factory floor.
- There were some light-hearted moments during his testimony. Plaintiffs’ attorney Nicholas Porritt mistakenly referred to Musk as “Mr. Tweet,” eliciting a chuckle from Musk, who acquired Twitter for $44 billion late last year.
- Musk said his $420-a-share offer for Tesla in 2018 was “not a joke.” The number is a slang term for marijuana consumption. But he admitted that “there is some karma around 420,” and there’s a “question whether that is good or bad karma at this point.”
- Musk said his private SpaceX company was a guide for how Tesla could run. He said he would have been willing to sell some of SpaceX to finance the Tesla go-private deal and that that alone would have secured the funding needed.
- Musk said that he chose to send the go-private tweet because he got a heads up that the Financial Times was going to publish an article confirming that the Saudi PIF had built a 3-5% stake in Tesla, and that it would disclose his plans. He said he wanted to make sure all investors were aware. He said he didn’t read the article before tweeting because “by then it would have been too late.”
- Text messages between Musk and his Tesla team showed that Musk knew they were working on an official company statement detailing the transaction, but Musk sent the tweet anyway. “I was worried that shareholders would think I was trying to exclude them,” he said.
- Perhaps not directly related but still relevant, Tesla’s stock is up almost 8% as of the market close.
- Musk will resume testifying Tuesday morning.
–With assistance from Joel Rosenblatt, Dana Hull and Malathi Nayak.
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