Tesla tweet case: Elon Musk not guilty of misleading investors
If found guilty, the tech billionaire could have been responsible for paying out billions in damages.
Tesla co-founder Elon Musk has been found not guilty for a tweet he posted in August of 2018, saying he had “funding secured” to take the electric carmaker back into private ownership.
This is according to a new tweet Musk posted on Saturday morning. “Thank goodness, the wisdom of the people has prevailed!” the billionaire said.
“I am deeply appreciative of the jury’s unanimous finding of innocence in the Tesla 420 take-private case.”
Misleading shareholders
The case came about when shareholders claimed that the entrepreneur misled them with his posts and that they had lost billions of dollars because of them.
If found guilty, Musk could have been responsible for paying out billions in damages.
It has been reported that the nine jurors in the case took less than two hours to reach their verdict on Friday afternoon.
The trial focused on one particular post: Musk’s tweet on August 7 2018 that said “Am considering taking Tesla private at $420. Funding secured.”
Thank goodness, the wisdom of the people has prevailed!
I am deeply appreciative of the jury’s unanimous finding of innocence in the Tesla 420 take-private case.
— Elon Musk (@elonmusk) February 3, 2023
During the class-action lawsuit, shareholders argued that Musk had lied when he tweeted later in the same day that “investor support is confirmed.”
These statements led to Tesla’s stock price surging and then falling back again as it became clear the proposed buyout would not happen.
One economist hired by the shareholders argued that investor losses were as high as $12 billion.
It wasn’t just the shareholders that were upset.
More lawsuits
The U.S. Securities and Exchange Commission (SEC) also sued Musk over his tweets. The settlement saw the CEO step down as Chairman of Tesla.
During the trial, Musk questioned whether his tweets had any effect whatsoever on Tesla’s stocks.
“At one point I tweeted that I thought that, in my opinion, the stock price was too high… and it went higher, which is counterintuitive,” he said.
Musk’s lawyer, Alex Spiro, further stated that “Just because it’s a bad tweet doesn’t make it a fraud.”
Musk also defended his actions by noting that he thought he had a verbal commitment from Saudi Arabia’s sovereign wealth fund for the deal.
“Just because I tweet something does not mean people believe it or will act accordingly,” said Musk on the stand.
The plaintiffs, however, replied that stating “funding secured” implied more than a verbal agreement.
Nicholas Porritt, an attorney for the Tesla shareholders, said: “We are disappointed with the verdict and are considering next steps.”
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