Elon Musk’s 2018 tweet was true, got a close look at the judge

The billionaire and his electric-car company may soon find themselves in a fight with shareholders who alleged that Twitter posts caused them billions of dollars in damages.

To avoid allegations that the missile was fraudulent, Musk filed a court filing last month with what he explained three-and-a-half years ago: Saudi Arabia’s sovereign wealth fund agreed to support his attempt to take the company private. went.

“I don’t think it’s too complicated, factually,” said US District Judge Edward Chen during a hearing Thursday in San Francisco. He said that although Saudi funds had expressed interest, “the funds were not secured. ”

Musk’s motives parsing behind the Twitter post are at the center of controversy over whether the statement was “undeniably false,” as shareholders argue — or, as his lawyers say, it was “entirely true.”

Investors are asking Chen to decide on his own some major legal issues without putting him on a jury. A decision in favor of investors would allow them to focus the trial only on linking Musk’s alleged false statement to his stock market losses.

Back in 2018, the tweet also led to a fraud lawsuit against Musk and Tesla by the Securities and Exchange Commission. Musk is now seeking to be relieved of the ban on his tweets that he agreed to as part of the settlement of that case. “I will never lie to shareholders,” Musk said this week in an affidavit to a New York judge handling the SEC case.

“Let’s talk about lies,” Chen said at the start of Thursday’s hearing. Much of the debate that followed focused on “secured funding”.

Musk’s lawyer, Alex Spiro, said shareholders are taking more consideration of the tweet. “I’m worried about dissecting it too much,” he told Chen, “the context matters.” Importantly, Musk is rich enough that he could have financed the private transaction himself, Spiro said.

He told the judge, “There has never been a funding issue in any of Mr. Musk’s deals. The entrepreneur – now the richest man in the world – has “great personal resources that he can tolerate.” If anything , then shareholders interpreted Musk’s tweet as meaning “Elon could bid to take it private,” Spiro said.

Nicolas Porit, the attorney representing the shareholders, focused on the past of the last word of the tweet. “Safe,” said Porit, “that means it’s in the bag, it’s closed and full.”

Still, Musk never spoke to any potential investors other than the Saudi fund, which he intended to take only a small stake in the distorted transaction, Porit said. “The whole thing was so temporary, so much was found in the sky at the moment that he never had any idea how much money would be needed for this,” the lawyer said.

Chen had his doubts, too.

Chen said there was no term sheet, no price, and no conditions placed with the Saudi fund. “A lot of things were not discussed, it seemed quite preliminary,” he said, adding: “How can there be a bid, a deal, even if it is a handshake deal?”

The judge said he would deliver the final verdict later.

Case Tesla Inc. Securities Litigation, 18-CV-04865, US District Court, is at the Northern District of California (San Francisco).

This story has been published without modification in text from a wire agency feed. Only the title has been changed.