Elon Musk begins testifying today in a jury trial about whether his false tweets in 2018 about taking Tesla private caused investors to lose billions of dollars.
During his testimony in a federal courtroom in San Francisco, Musk denied that his tweets caused Tesla’s share price to go up or down. “Just because I tweeted something doesn’t mean people believe it or will act accordingly,” Musk said in response to a question from attorney Nicholas Porritt, who is representing the investors in the class action lawsuit against Musk.
“It’s hard to say that the share price is related to the tweets,” the Tesla CEO said on the witness stand. “There have been many instances where I thought if I tweeted something the share price would go down.”
Musk put out a tweet in May 2020 saying books, “Tesla’s stock price is too high.” Musk said today that Tesla’s share price rose “unexpectedly” after the tweet.
“Even though I tweeted that the share price, in my opinion, is too high, the share price then went up,” Musk said today. “You’d think if you tweeted the stock price was too high it would go down, but it actually went up.”
“What I’m trying to say is that causation is clearly not there just because of a tweet,” Musk said in court today.
The judge ruled that the “funding secured” tweet was false
The current issue is primarily about two tweets from Musk on August 7, 2018. The first He said, “I’m thinking of getting a Tesla at $420. Financing secured.” the Second The tweet said, “Investor support confirmed. The only reason this is not confirmed is because it is contingent on shareholder voting.”
Musk only testified for less than a half hour today but will retake the situation on Monday. For this reason, Burritt has not yet questioned Musk about the specific tweets this issue is about.
Judge Edward Chen already ruled That the two tweets about making Tesla private were wrong and reckless. Before today’s testimony began, Chen reminded the jury that they must assume the tweets were false.
However, the jury still has to decide whether Musk knew they were untrue and whether the tweets gave reasonable investors the impression that Tesla’s situation was different from reality, Chen said. The case is being held in the US District Court for the Northern District of California.
Before Musk began testifying today, jurors heard two more witnesses called by prosecutors — an investor who bought Tesla shares after Musk’s tweets and an expert witness who testified about management buyouts. Musk’s testimony began near the end of the trial day.
During Opening statements on WednesdayHowever, Musk’s attorney, Alex Spiro, argued that Musk’s false tweets were merely “inaccurate technical words” and were not material to investors. Porritt said investors bought Tesla stock based on Musk’s claim that he secured financing to take the company private at $420 a share.
“There was no dispute that Elon Musk lied, and there was no dispute that Tesla investors were harmed by these lies,” Porritt said.
Musk: ‘You’re trying to confuse misinformation with short’
Today, Burritt asked Musk if he knew his tweets about Tesla are subject to federal securities laws that require them to be accurate, just as press releases and SEC filings are.
Musk replied, “Yeah, but obviously, there’s a limit if you have 240 characters to what you can say. Obviously you can be more detailed in a file, and everyone on Twitter understands that.” (Twitter’s character limit is 280, but Musk has repeatedly said it was 240 during his testimony.)
Porritt responded, “There is no exception in the SEC rules based on character restrictions on Twitter, is there?”
“There isn’t, but I think the limitations of personality can’t be ignored and everyone on Twitter is aware of the limitations of personality,” Musk said. “I think you can be completely honest. But can you be thorough? Of course not,” Musk said in response to another question.
Musk accused Porritt of asking misleading questions. “The tweets are honest. They’re simply short. I think you’re trying to confuse misleading with short. That’s misleading,” Musk said.
Musk also said, “Tweets are information that I think the public should hear.”
In response to other questions, Musk also discussed short sellers in the context of why he wanted to take over Tesla in 2018. “I think short selling should be illegal. It’s a way for bad people on Wall Street to steal money from small investors.”
Short sellers “want Tesla dead,” Musk said, “spreading false stories in the media to make the stock go down and doing everything they could to make the company die. It’s evil.”