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Elon Musk will go on trial next week for his infamous crimes Tweet He claimed he had secured the funds to take Tesla private at $420 a share. His 10-day civil trial, which includes jury selection, is scheduled to begin on Tuesday, January 17, in the United States District Court for the Northern District of California.
The class action lawsuit alleges that Musk harmed investors with the following tweet on August 7, 2018: Additional statements by Musk and Tesla reinforced the false impression given by Musk’s nondisclosure claim, lead plaintiffs say.
“Investors lost billions of dollars between August 7, 2018 and August 17, 2018 as a result of the turmoil in Tesla stock, options and bond prices caused by Musk and Tesla’s statement. said lead plaintiff Glen Littleton in an October trial summary. He said. “These damages include losses arising from the impact on the price of Tesla Securities shortly after the August 7, 2018 tweet, and the August 8, 2018 to August 17, 2018 tweet. was made aware of by investors and has been corrected. Without Musk and Tesla’s false statements, these losses would not have been incurred by Tesla investors.”
Law professor Robert Miller told Ars that he thinks Musk will lose and that the only open question is how much he will have to pay in damages. “Elon is going to lose and he’s going to lose a lot of money. We’re just talking about exactly how much,” said the University of Iowa College of Corporate Finance and Law. said Miller, chairman of F. Arnold Daum of . law. The lawsuit will determine “how much of inflation and deflation is due to fraud,” he said.
Another expert agrees. Minor Myers, a professor of corporate law at the University of Connecticut, told Reuters, “Everything is set for plaintiffs’ victory here.” Musk may be unlikely to win outright, but the plaintiff must prove that his false statements directly caused the investor’s loss in order to obtain a large payout. They are seeking billions of dollars in damages from investors who bought Tesla shares at high prices and sold them at a loss.
According to Musk’s filing, plaintiffs’ claims amount to damages of $66.67 per share, including the alleged effects of Musk’s tweets and “consequential effects” such as shareholder lawsuits and negative news coverage. It says it will. Musk disputes this calculation.
The $420 price suggested in Musk’s tweet was almost 20% above Tesla’s closing price of $349.54 on Aug. 2, 2018. “The exact calculation was $419.49, but Musk thought his then-girlfriend Claire Elise Boucher (also known as ‘Grimes’) would find it funny because of the significance of the number. That’s why we rounded up the price to $420 per share. cannabis users. ”
A judge ruled the tweet was false and reckless
A jury will decide the case, but District Judge Edward Chen has already issued a major ruling that will make it harder for Musk to win. In April 2022, Chen granted in part Littleton’s motion for partial summary judgment, finding that Musk recklessly made false statements.
“Based on the evidence presented, the court determines that the first three statements at issue are false and that there is no genuine argument that Mr. Musk recklessly made those statements.” Chen’s judgment stated. Chen only spoke out against Lyttelton in his fourth statement from Musk’s Aug. 13, 2018 blog post, describing ongoing communications with the Saudi sovereign wealth fund.
The jury will recognize its ruling. As Chen wrote, “[T]His jury is told that the court has already determined that the August 2018 tweet was false and made by a necessary scientist. “
The first of three statements Chen determined to be false and reckless was the infamous tweet. Chen’s ruling said, “He has only one conclusion that a reasonable jury can reach.i.e., that Mr. Musk publicly tweeted that the funds had been recklessly secured. ”
