Elon Musk has been sued by shareholders who say the tycoon acted negligently in an attempt to squeeze out investors.
San Francisco:
Tesla CEO Elon Musk took the stand Friday in a California fraud lawsuit, accused of lying in tweets about taking the auto company private, punishing investors.
Musk was called to testify by lawyers for angry investors who accused him of spending millions of dollars in 2018 with untrue tweets about receiving money to buy out shareholders at $420 per share. Was told.
The multi-billionaire’s tweets sent Tesla share price on a rollercoaster ride and Musk has been sued by shareholders, who say the tycoon acted negligently in an attempt to squeeze out investors who had bet against the company.
Musk, who only bought Twitter in October, downplayed the power of his tweets, noting that he once posted that he thought the Tesla stock price was overpriced, and that “it went overboard, Which is counter-intuitive.”
“What I’m trying to say is clearly not just because of one tweet,” Musk said in the testimony.
The hearing on Friday began with Harvard law and business professor Guhan Subramanian, who was called as an expert witness by the plaintiffs.
He described Musk’s tweeted offer to privately own Tesla as “delusional” and “simply wrong,” given the way such mega-deals typically go.
When asked by a defense attorney about Musk’s tweet, Subramanian said, “All I can say is that it is wrong, in terms of the process of the deal… It is not correct.”
– The word ‘reckless’ –
Testimony in the trial opened on Wednesday with a lawyer for troubled investors telling jurors Musk lied about having funding.
Nicholas Porritt, who represents lead plaintiff Glenn Littleton and other Tesla investors, said the tweets cost “regular people” to lose “millions and millions of dollars.”
Called as the first witness, 71-year-old Littleton told jurors that he was heavily invested in Tesla in 2018 to the point that the share price climbed to $500 or more.
Littleton testified that he was “quite surprised” by Musk’s tweet about taking the company private at $420 per share because it put almost all the money he had invested in Tesla at risk.
“It pretty much wiped me out,” Littleton said.
Lyttelton told jurors that he scrambled to save whatever he could from his investments, taking huge losses from most of his positions.
Kasturi is expected to continue testifying at the trial on Monday, when his lawyers will have a chance to refute allegations that he was a fraud.
The case revolved around a pair of tweets in which Musk said “funding secured” for a project to buy the publicly traded electric automaker, then said in a second tweet that “investor support confirmed”. Is.”
Porritt told jurors that Musk had chosen the $420 share price in the tweet “as a joke” and that funding to take Tesla private was never closed, nor credibly pursued. Was.
Musk’s attorney Alex Spiro said in his opening remarks that even though the tweets may have been a “reckless choice of words,” they were “not a hoax, not even close.”
The fraud trial is expected to last three weeks.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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