Elon Musk said on Monday he is not only confident that he will have the support of Saudi investors to take Tesla private in 2018, but he also sold his stake in his rocket company, SpaceX. He testified that he was able to raise the funds for the acquisition through
Musk tweeted on August 7, 2018 to defend himself as part of an ongoing lawsuit against the CEO for allegedly defrauding investors. secured the funds Taking Tesla private at $420 per share means that “Investor support confirmedTesla shares soared after Mr. Musk’s tweet and fell when it became clear that the acquisition would not happen.
If he loses, Musk stands to pay billions in damages, but what’s really at stake for the world’s richest man is his integrity and taking care of his investors. That’s his reputation.
In federal court in San Francisco, Musk doubled down on his belief that he had received verbal confirmation from the Saudi Public Investment Fund (PIF) to take Tesla private. Musk testified that the fund “backed off” on its commitments. He also confirmed that he had not discussed the purchase price with PIF representatives.
Even without PIF funding, he “felt funded” with SpaceX stock alone. Musk said he nodded to buying Twitter after selling Tesla shares and would have considered doing the same to close the deal to take Tesla private.
Plaintiffs’ attorneys counter that last year’s Musk deposition did not include a reference to the sale of SpaceX shares, so its inclusion today was made in hindsight. bottom.
Musk’s attorney, Alex Spiro, also noted that Musk has the ability to “raise more money than anyone in history.”
A nine-person jury will decide whether the CEO artificially inflated the company’s stock price in a tweet about the acquisition, and if so, by how much. U.S. Judge Edward Chen ruled last year that Mr. Musk’s posts were false and reckless, which could affect jury opinion.
Musk says he’s trying to do what’s best for investors
Musk and his lawyers also argued that he wasn’t trying to defraud investors and that he actually wanted to bring in some of them. A hardcore foundation is important for a company. However, the SEC does not allow individual investors to invest in privately held companies.
“There are concerns that if Musk takes the company private, someone who owns two Tesla shares and has a low-paying job can continue to be an investor. , because we have a fan base of very loyal private investors who buy Tesla products and believe in Musk,” Josh White, assistant professor at Vanderbilt University and former SEC financial economist, told TechCrunch. told to
During Monday’s trial, Musk provided details about certain special-purpose vehicles (SpaceX is a privately held company) available to SpaceX investors.
“Mr. Musk was trying to say that he could invest in a kind of special purpose vehicle that would allow individual investors to come together and create something like a fund, but the fund is actually privately held,” White said. We are investing in Tesla.”
White noted that these types of vehicles are not always good for investors as they are less liquid.
Nonetheless, plaintiffs’ attorneys have shown through documentary evidence from Goldman Sachs and other investors that there are limits to keeping private investors involved in private Tesla.
While on the stand, Musk also framed a tweet about the imperfect deal in an attempt to include shareholders in consideration of taking the company private. He said the Financial Times knew about Saudi Arabia’s potential investment in Tesla and Tesla’s take-private deal, and he fears Musk himself will leak the information before he has a chance to tell shareholders. said.
“I was worried that shareholders would think I was trying to get them out,” Musk said. “And I want to be clear that I was trying to support them.”
“The $420 price tag was no joke.”
The U.S. Securities and Exchange Commission also investigated Musk’s tweets, which resulted in a combined $40 million settlement from him and Tesla, requiring Tesla’s attorneys to verify Tesla-related tweets before hand, and Musk later tried to appeal.
The SEC argued that Musk’s rounding up its offer from $419 to $420 per share was a reference to weed culture.
Musk denied this, saying it was a coincidence that the $420 also referred to Weed Day on April 20.
Musk said he was “chosen because it was a 20% premium to the stock price.” “The $420 price tag was no joke.”
Musk also testified briefly last Friday, telling jurors he did not believe his tweets had an impact on Tesla stock.
“Just because I tweet something doesn’t mean people will believe it or act on it.
