Elon Musk at the Tesla Model X launch in Fremont, California on Sept. 29, 2015 (AFP/SUSANA BATES)
More than four years after tweeting that he would take Tesla off the stock market, Elon Musk faces accountable in court by investors who feel slighted by his remarks, having already incurred the wrath of authorities.
“Elon Musk, (then) CEO of Tesla, lied and his lies cost people millions of dollars,” said Nicholas Porritt, attorney for the plaintiffs, investors brought together in a class action lawsuit.
On August 10, 2018, they filed a complaint against the company executive for “artificially manipulating the price of Tesla stock in order to completely screw over the investors” who were betting on the price drop.
The fraud trial opened Tuesday in San Francisco with the selection of a nine-person jury and is expected to last three weeks. Elon Musk himself is expected to take a stand, perhaps as early as Friday.
He created astonishment on August 7, 2018 by saying he wanted to withdraw his group from the stock market by paying $420 per share.
He added that funding was “safe” to carry out this operation and indicated a few days later that it was in particular discussions with the Saudi sovereign wealth fund.
According to the defense, Elon Musk had every intention of taking Tesla out of the stock market, and he had no doubts about financing, thanks to the assurances of this fund.
Alexander Spiro, the billionaire’s lawyer, admitted his client tweeted “in haste” after an article in the Financial Times revealed the Saudi fund had invested in Tesla.
– “Joke” –
The choice of words was “ill-advised,” but “it’s not cheating,” the lawyer hammered out.
“During the entire process, Mr. Musk has not sold a single share. No Tesla executive, not a single board member has sold a single share. In real cases of fraud, people have an agenda, they want to take advantage of It shows that this was not a fraud,” he added.
Shares of the electric car maker had jumped to $386.48 on the back of the tweets. By August 16, it was down to $335.45.
On that date, the New York Times had published an interview with Elon Musk “which confirmed the worst rumors”, claimed Nicholas Porritt, in particular that “no one on the board of directors had re-read the tweets composed from his car en route to the airport, and that the price, $420, was a joke.”
In the United States, the numbers 4 and 20 together are associated with cannabis use. When the billionaire offered to buy Twitter last spring, he chose a price of $54.20 per share.
“I can tell you it wasn’t a joke to Glen Littleton (lead plaintiff) or the other investors who lost millions,” said Nicholas Porritt.
The lawyer explained to the jury that this case is important because it concerns compliance with the laws that regulate financial markets, markets on which pension funds and insurance companies depend, among others.
– “Gifted but barred” –
In addition to Elon Musk, Tesla, as a legal entity, and the members of the board of directors of the manufacturer at the material time are also involved in this procedure.
For four and a half years, Elon Musk has never stopped explaining himself on this famous tweet.
Tesla had quickly abandoned the idea of the delisting, but the US stock exchange watchman, the SEC, filed a complaint, believing that the boss had not provided proof of its financing.
The regulator had ordered Elon Musk to relinquish the chairmanship of the Tesla board, pay a $20 million fine, and later demanded that his tweets directly related to Tesla’s business be pre-approved by a competent lawyer.
But the intervention of the authorities has not diminished his desire for provocations on Twitter, his favorite social network, which he bought in October after months of surprises.
Since then, his controversial decisions at the head of the platform have sparked outrage on an almost daily basis, so much so that his lawyers last week asked a California judge to move the trial to Texas, fearing the jury was biased.
The motion was denied, but comments from prospective jurors, read in court on Tuesday, revealed just how divisive the multibillionaire is.
Some have described him as a “successful pioneer”, others as “arrogant, unpredictable and sometimes irrational” or “gifted but crazy”.