Elon Musk’s tweet about taking the electric car maker Tesla private was “hasty” but “irrefutably true.” That’s what Musk’s lawyer stated in his opening argument to jurors in San Francisco federal court.
The jury will soon have to decide whether Musk committed fraud with the August 2018 tweet and harmed investors. A group of investors has sued Musk and Tesla because the tweet would have caused billions of dollars in damage. In addition, they have called Musk’s tweets false and misleading.
According to Musk’s attorney, Tesla’s CEO was on his way to the airport when he made the “split-second” decision to tweet that he was “considering” taking the company private. Musk did so after reading a news article revealing that Saudi Arabia had taken a significant stake in Tesla. As a result, Musk concluded that “funding was secured” to buy out Tesla’s shareholders.
“He decided in haste that disclosure was the best course of action,” the lawyer said. “He didn’t want there to be a leak.” According to the lawyer, Musk spoke the “complete truth” in the tweet. He further called the tweet “a thought bubble”, in which Musk made his considerations known. In addition, according to Musk’s lawyer, the messages on Twitter were “not material to the market”, and Tesla’s stock price rose when details of the plan were revealed at a meeting following the tweet.
On the other hand, the attorney for the duped Tesla shareholders painted the conscious tweet and the follow-up messages from Musk and the company as “lies”, resulting from which ordinary investors lost a lot of money. A few weeks after sending the Twitter message, the CEO announced that Tesla would remain on the stock exchange. “For markets to function normally and fairly, Musk and the company must be held accountable,” said Tesla shareholders’ attorneys.
Musk’s tweet caused Tesla’s share price to fluctuate at the time, and the American stock market watchdog SEC accused him of fraud. Musk and Tesla previously settled with the SEC for $40 million, and he stepped down as chairman of the company for a three-year term.