A U.S. jury ruled yesterday that Tesla CEO Elon Musk and his company are not liable for misleading investors, Reuters reported. The decision comes after Elon Musk tweeted in 2018 that he had raised money to take the company private.
Tesla shareholders are demanding billions of dollars in damages in a case accusing Elon Musk of tweeting fraud. The decision was also important to Elon Musk himself, who has vigorously defended his ability to tweet widely. The jury returned its verdict about two hours after it began deliberating.
Tesla shareholders claimed that Elon Musk misled them with his Aug. 7, 2018, tweet. Elon Musk tweeted at that time that he was considering taking the company private at $420 per share (currently about 2,827 yuan), a premium of about 23 percent over the previous day’s closing price, and that “funding is already in place.” Tesla shareholders said Elon Musk lied when he said on Twitter later that day that “investor support is confirmed.
Tesla shares soared after the tweet but fell again after Aug. 17, 2018, when it became clear that the takeover would not happen, and an economist hired by Tesla shareholders calculated that investors lost as much as $12 billion (currently about 80.76 billion yuan).
Elon Musk spent nearly nine hours on the witness stand during the three-week trial, telling jurors he believed Twitter was real. He said he had arranged the necessary financing, including a verbal commitment from Saudi Arabia’s sovereign wealth fund, the Public Investment fund. Elon Musk said the fund later reneged on its promise.
Elon Musk later testified that he believed he could sell enough shares of rocket company SpaceX to fund the acquisition and that he “felt financially secure” on the basis of SpaceX stock alone. Elon Musk also said he sent the tweets to put minority shareholders on the same footing as large investors who knew about the deal. But he acknowledged that he had no formal commitment from the Saudi fund and other potential backers.
Elon Musk noted that his tweets in general have not always affected Tesla’s stock as much as he expected. “Just because I post something on Twitter doesn’t mean people will believe it or act accordingly.”
Elon Musk’s lawyer, Spiro, said Elon Musk’s “funded” tweet was “technically inaccurate,” but that investors were only interested in whether Elon Musk was considering an acquisition. “Just because it’s a bad tweet doesn’t make it fraudulent,” he said in closing arguments.
