Musk: ‘Felt funding was secure,’ in 2018

Tweets based in belief Saudis would invest, not attempt to mislead, jury told

SAN FRANCISCO — Elon Musk returned to federal court Monday in San Francisco, testifying he believed he had secured financial backing to take Tesla private during 2018 meetings with representatives from Saudi Arabia’s Public Investment Fund — although no specific funding amount or price was discussed.

The 51-year-old billionaire Tesla CEO and Twitter owner is facing a class-action lawsuit filed by Tesla investors saying he misled them with a tweet saying funding was secured to take his electric car company private. But the deal never happened, and the tweet resulted in a $40 million settlement with securities regulators.

The trial hinges on whether a pair of tweets Musk posted on Aug. 7, 2018, damaged Tesla shareholders during a 10-day period leading up to Musk’s admission that the buyout he had envisioned wasn’t going to happen.

Speaking in a soft, halting tone, Musk said Monday while testifying that it was important for jurors to know that he “felt that funding was secured” because of his ownership of “SpaceX stock alone.”

“Just as I sold stock in Tesla to buy Twitter. … I didn’t want to sell Tesla stock, but I did sell Tesla stock,” he said of the sale to make up for the lack of funding from other sources for his $44 billion deal to take Twitter private. Musk sold nearly $23 billion worth of his car company’s shares between last April, when he started building a position in Twitter, and December.

“My SpaceX shares alone would have meant that funding was secured,” Musk said of the 2018 tweets.

Even before Musk first took the stand Friday, U.S. District Judge Edward Chen had declared that jurors can consider those two tweets to be false, leaving them to decide whether Musk deliberately deceived investors and whether his statements saddled them with losses.

Musk has previously contended he entered into the Securities and Exchange Commission settlement under duress and maintained he believed he had locked in financial backing for a Tesla buyout during meetings with representatives from Saudi Arabia’s Public Investment Fund.

At a July 2018 meeting, the Saudi Public Investment Fund’s Yasir Al-Rumayyan “confirmed unequivocally that they would support Tesla going private. That was part of what ‘funding secure’ meant,” Musk said Monday. “But in addition there was SpaceX stock, which could also be used.”

In the first of the 2018 tweets, Musk stated “funding secured” for what would have been a $72 billion buyout of Tesla, at a time when the electric automaker was still grappling with production problems and was worth far less than it is now. Musk followed up a few hours later that day with another tweet suggesting a deal was imminent.

After it became apparent the money wasn’t in place to take Tesla private, Musk stepped down as Tesla’s chairman while remaining CEO as part of the SEC settlement, without acknowledging wrongdoing.