Musk cleared of wrongdoing related to tweets from 2018
A jury on Friday decided Elon Musk didn’t deceive investors with his 2018 tweets about electric automaker Tesla.
The verdict by the nine jurors was reached after less than two hours of deliberation after a three-week trial and represents a major vindication for Musk.
The trial pitted Tesla investors represented in a class-action lawsuit against Musk, who is CEO of the electric automaker and the Twitter service he bought for $44 billion a few months ago.
In 2018, Musk tweeted that he had the financing to take Tesla private even though it turned out he hadn’t gotten an ironclad commitment for an aborted deal that would have cost $20 billion to $70 billion to pull off.
Musk’s integrity was at stake at the trial as well part of a fortune that has established him as one of the world’s richest people. He could have been saddled with a bill for billions of dollars damages had the jury found him liable for the 2018 tweets that had been deemed falsehoods by the judge presiding over the trial.
Earlier Friday, Musk sat stoically in court, while he was both vilified as a rich narcissist whose reckless behavior risks “anarchy” and hailed as a visionary looking out for the “little guy” in the trial’s closing arguments.
The trial hinged on whether Musk’s tweeting in 2018 misled Tesla shareholders, steering them in a direction that they argue cost them billions of dollars. The civil case centered on two tweets Musk posted Aug. 7, 2018, about a Tesla buyout that never happened.
In the first tweet, posted just before he boarded his private jet, Musk declared he had “funding secured” to take Tesla private. A few hours later, Musk sent another tweet indicating that the deal was imminent.
The tweets caused Twitter’s stock to surge during a 10- day period covered by the lawsuit before falling back after Musk abandoned a deal in which he never had a firm financing commitment, based on evidence presented during the three-week trial.
Musk’s decision to show up for the closing arguments — even though his presence wasn’t required — underscored the importance of the trial’s outcome to him.
Nicholas Porritt, a lawyer for the Tesla shareholders, urged the jurors to rebuke Musk for his “loose relationship with the truth.”
“Our society is based on rules,” Porritt said. “We need rules to save us from anarchy. Rules should apply to Elon Musk like everyone else.”
Alex Spiro, Musk’s attorney, conceded the 2018 tweets were “technically inaccurate.” But he told the jurors, “Just because it’s
a bad tweet doesn’t make it a fraud.”
U. S. District Judge Edward Chen, who presided over the trial, decided last year that Musk’s 2018 tweets were false and has instructed the jury to view them that way.
During eight hours on the stand earlier in the trial, Musk insisted he believed he had lined up the funds from Saudi Arabia’s Public Investment Fund to take Tesla private after eight years as a publicly held company. He defended his initial August 2018 tweet as well-intentioned and aimed at ensuring all Tesla investors knew the automaker might be on its way to ending its run as a publicly held company.
“I had no ill motive,” Musk testified. “My intent was to do the right thing for all shareholders.”
Spiro echoed that theme in his closing argument.
“He was trying to include the retail shareholder, the mom and pop, the little guy, and not seize more power for himself,” Spiro said.
Por r it t , meanwhi le, scoffed at the notion that Musk could have concluded he had a firm commitment after a 45-minute meeting at a Tesla factory on July 31, 2018, with Yasir al-rumayyan, governor of Saudi Arabia’s wealth fund, given there was no written documentation.
A text message that alRumayyan sent later in August that is part of the trial evidence also indicated that the Saudi fund was interested only in learning more about Musk’s proposal to take Tesla private at a time the company was valued at about $60 billion.
“Apparently a $60 billion financing commitment was obtained and no one wrote down a single word,” Porritt said, while asserting that amount was larger than the combined economic output of Nicaragua, Honduras and El Salvador.
“Elon Musk apparently thinks it is easier to get billions of dollars in financing than an auto loan or a mortgage,” Pollitt added.