Elon Musk testified Friday as part of a trial over a 2018 tweet in which he claimed to have “secured funds” to take Tesla private, a tweet that shareholders say cost them millions in business losses.
The Tesla CEO appeared in federal court in San Francisco and defended himself by saying that “just because I tweet something doesn’t mean people believe it or act on it.”
Musk’s testimony began with questions about his use of Twitter, the social media platform he bought in October. He called it the most democratic way to communicate, but said his tweets didn’t always affect Tesla’s stock the way he expected.
The class action lawsuit in federal court in San Francisco centers on allegations that the Tesla CEO lied when he sent the tweet, costing investors. Earlier Friday morning, investor Timothy Fries told a jury how he lost $5,000 buying Tesla stock after Musk sent out the tweet at the center of the lawsuit.
the case is a rare securities class action lawsuit trial and the plaintiffs have already cleared major legal hurdles, with US Judge Edward Chen ruling last year that Musk’s post was false and reckless.
Fries told the jury that the secured funding meant to him that “there was a vetting, a critical review of those funding sources.”
Musk, who wore a dark suit over a white button-down shirt, testified for less than 30 minutes before the court adjourned until Monday. He spoke quietly and sometimes in an amusing way, in contrast to his occasional combative testimony in past trials.
Musk described the difficulties the company was going through at the time he sent the “funding secured” tweet, including bets from short sellers that the stock would fall.
“A bunch of sharks on Wall Street wanted Tesla dead, very desperately,” he said, describing short sellers, who profit when a stock falls in price.
Musk’s attorney, Alex Spiro, told jurors in his opening statement Wednesday that Musk believed he had financing from Saudi backers and was taking steps to make the deal happen. Fearing media leaks, Musk tried to protect the “common shareholder” by sending the tweet, which contained “technical inaccuracies,” Spiro said.
Guhan Subramanian, a professor at Harvard Law School, told the jury that Musk’s behavior in 2018 lacked the hallmarks of traditional corporate dealings by tweeting his interest in Tesla without proper financial or legal analysis.
“Compared to the standard template, it’s an extreme case,” said Subramanian, calling Musk’s approach “unprecedented” and “inconsistent.”
A nine-person jury will decide whether the tweet artificially inflated Tesla’s stock price by gambling with the state of the deal’s funding, and if so, by how much.
The defendants include current and former Tesla directors, whom Spiro said had “pure” motives in their response to Musk’s plan.
Reuters contributed to this report
