Tesla CEO Elon Musk faced trial on Tuesday for allegedly manipulating the stock market with a tweet in 2018. A federal judge on Friday rejected his request to move the case out of California, with jury selection set to begin today.
The case in question relates to a Twitter post where Musk claimed he had ‘secured’ enough money to take Tesla private at $420 a share. This in turn caused a whirlwind in the company’s share price, and Musk was promptly sued by shareholders for having spent billions of dollars with his post.
Following the post, Tesla stock trading was halted, and shares then remained highly volatile for weeks. The US Securities and Exchange Commission ordered Musk to step down as Tesla’s board chairman and pay a $20 million fine.
The report later quoted the SpaceX CEO as saying that he was in talks with Saudi Arabia’s Sovereign Wealth Fund and felt confident about funding. No such deal was ever announced.
According to reports, Judge Edward Chen has already determined that Musk’s buyout tweet was false, leaving it up to the jury to decide whether he acted negligently by posting it and whether it caused damage to Tesla shareholders. Financial loss occurred.
Incidentally, Tesla shares are now worth about six times more than they were at the time of Musk’s tweet (after adjusting for the two stock splits that have taken place since 2018). The company’s stock price spiked even higher before Musk decided to buy Twitter at a price that he admitted was far higher than the company was worth. Tesla shares are currently hovering around $120, having lost nearly half their value since Twitter took control.
(with inputs from agencies)
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