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Elon Musk began giving evidence today in the jury trial over whether his fake tweets in 2018 about taking Tesla private caused investors to lose billions of dollars.
During testimony in federal court in San Francisco, Musk denied that his tweets drove Tesla’s stock price up or down. “Just because I tweet something doesn’t mean people will believe it or act on it,” Musk said in response to a question from attorney Nicholas Porritt, who is representing investors in the class action lawsuit against Musk.
“It’s hard to say the stock price is tied to the tweets. There were many instances where I thought if I tweeted something the stock price would go down,” the CEO said. of Tesla on the witness stand.
Musk posted a tweet in May 2020 in which he wrote, “Tesla stock price is too high in my opinion.” Musk said today that Tesla’s stock price “counterintuitively” rose after the tweet.
“Even though I tweeted that in my opinion the stock price was too high, the stock price then went up,” Musk said today. “You would think that if I tweeted that the stock price was too high it would go down, but it actually went up.”
In fact, Tesla’s stock price fell 10% the day Musk posted that tweet, although the price rallied the following week.
“What I’m trying to say is that the causal relationship clearly doesn’t exist just because of a tweet,” Musk said in court today.
‘Secure Funding’ tweet was fake, judge said
The current case primarily concerns two tweets that Musk posted on August 7, 2018. first said, “I’m considering taking Tesla $420 privatized. Financing secured.” The second tweet said: “Investor support confirmed. Only reason it’s not certain is that it depends on shareholder votes.”
Musk only testified for less than half an hour today, but will take the stand again on Monday. For this reason, Porritt has yet to ask Musk about the specific tweets about this case.
Judge Edward Chen has already ruled that the two tweets about Tesla’s privatization were untrue and made recklessly. Before today’s testimony began, Chen reminded the jury to assume the tweets were false.
However, the jury is still out on whether Musk knew they were fake and whether the tweets gave reasonable investors a different impression of Tesla’s situation than the reality, Chen said. The case is pending in the U.S. District Court for the Northern District of California.
Before Musk began testifying today, jurors heard from two other witnesses called by the plaintiffs: an investor who bought Tesla stock after Musk’s tweets and an expert witness who testified about management buyouts. Musk’s testimony began towards the end of the trial day.
During Wednesday’s opening statements, Musk’s attorney, Alex Spiro, argued that Musk’s fake tweets were just “technical inaccuracies of the words” and not material to investors. Porritt said investors bought shares in Tesla based on Musk’s claim that he secured financing to take the company private at $420 per share.
“There is no doubt that Elon Musk lied, and there is no doubt that Tesla investors were hurt by those lies,” Porritt said.
Musk: ‘You’re trying to confuse misleading with short’
Today, Porritt asked Musk if he knew his tweets about Tesla were governed by federal securities laws requiring them to be accurate, just like press releases and Securities and Exchange filings. Commission.
“Yeah, but obviously there’s a limit if you have 240 characters to what you can say. Obviously you can be a lot more verbose on a record, and everyone on Twitter understands that,” Musk replied. (Twitter’s character limit is 280 characters, but Musk repeatedly said it was 240 characters during his testimony.)
Porritt replied, “There’s no exception in SEC rules based on character limitation on Twitter, is there?”
“There isn’t, but I think character limitation can’t be ignored and everyone on Twitter is aware of character limitation,” Musk said. “I think you can absolutely tell the truth. But can you be exhaustive? Of course not,” Musk said in response to another question.
Musk accused Porritt of asking misleading questions. “The tweets are true. They’re just short. I think you’re trying to confuse misleading with short. It’s misleading,” Musk said.
“Tweets are information that I think the public should hear,” Musk also said.
In response to further questions, Musk also discussed short sellers in the context of why he wanted to take Tesla private in 2018. “I think short selling should be made illegal. It’s a way for bad people on Wall Street stealing money from small investors,” Musk said.
Short sellers “want Tesla dead” and “spread false stories in the media to drive stocks down and do everything in their power to kill the company.” It’s wrong,” Musk said.
