Elon Musk takes the stand to defend himself against fraud charges
Elon Musk took the stand on Friday in San Francisco in a trial where he is accused of fraud by investors, for having tweeted in 2018 that he intended to take Tesla out of the stock market.
Alex Spiro, attorney for Elon Musk, arrives for the trial of Tesla shareholders at the Phillip Burton Federal Building on January 20, 2023 in San Francisco, California.
Getty Images via AFP
Dark suit, white shirt, he was sworn in at the start of the afternoon for a testimony which could continue on Monday. The boss of Tesla – and of Twitter, since the end of October – had created amazement on August 7, 2018 by saying that he wanted to withdraw his automotive group from the Stock Exchange at a price of 420 dollars per share, then that the financing was “secured” .
“Elon Musk, (then) CEO of Tesla, lied, and his lies caused people to lose millions of dollars”, launched Wednesday Nicholas Porritt, lawyer for the plaintiffs, investors gathered in a class action. On August 10, 2018, they filed a complaint against the business executive for having “artificially manipulated the price of Tesla’s stock in order to completely ruin investors” who were betting on the price drop.
The tweet was written “hastily”, the choice of words was “reckless”, but “it’s not a fraud”, hammered for his part Alexander Spiro, the billionaire’s lawyer. He assured Wednesday that Elon Musk had every intention of taking Tesla out of the stock market, and had no doubts about the financing, thanks to assurances from the Saudi sovereign wealth fund. The operation was unsuccessful.
“False and misleading”
The billionaire’s proposal was “incomplete, incoherent and illusory in certain aspects”, Guhan Subramanian, a Harvard professor and specialist in this type of transaction, said on Friday, called to testify by the plaintiffs. He pointed to the board’s lack of control over Elon Musk’s tweets, the “lack of consultation” with lawyers and bankers and the “one-sided announcement” on Twitter to demonstrate how the The Tesla boss’ approach diverged “extremely” from the usual process.
One of the complainants, Timothy Fries, said he invested in Tesla the day after the famous tweets. For him, the message about “funding secured” meant that Elon Musk “had a partner who was committed and whose funds were approved”. But the stock price fell in the following days. “I lost 5000 dollars (4600 francs). I hope to recover my losses,” said Timothy Fries.
Tesla’s stock jumped as high as $386.48 right after the tweets. On August 16, it had fallen to 335.45 dollars, according to the figures indicated to the jury on Tuesday by judge Edward Chen, far from the 420 dollars per share mentioned by Elon Musk.
The trial is expected to last three weeks. In a previous decision related to this case, the judge considered that the famous 2018 tweet could be considered “false and misleading”.
AFP
You found an error?Please let us know.