“Just as I sold stock in Tesla to buy Twitter. ... I didn’t want to sell Tesla stock but I did sell Tesla stock,” he said of the sale to make up for the lack of funding from other sources for his US$44 billion deal to take Twitter private. Musk sold nearly $23 billion worth of his car company’s shares between last April, when he started building a position in Twitter, and December.
“My SpaceX shares alone would have meant that funding was secured,” Musk said of the 2018 tweets.
Even before Musk first took the stand on Friday, U.S. District Judge Edward Chen had declared that jurors can consider those two tweets to be false, leaving them to decide whether Musk deliberately deceived investors and whether his statements saddled them with losses.
Musk has previously contended he entered into the Securities and Exchange Commission settlement under duress and maintained he believed he had locked up financial backing for a Tesla buyout during meetings with representatives from Saudi Arabia’s Public Investment Fund.
At a July 31, 2018 meeting, the Saudi Public Investment Fund’s Yasir Al-Rumayyan “confirmed unequivocally that they would support Tesla going private. That was part of what ‘funding secure’ meant,” Musk said Monday. “But in addition there was SpaceX stock, which could also be used.”
In the first of the 2018 tweets, Musk stated “funding secured” for what would have been a US$72 billion — or US$420 per share — buyout of Tesla at a time when the electric automaker was still grappling with production problems and was worth far less than it is now. Musk followed up a few hours later with another tweet suggesting a deal was imminent.
Nicholas Porritt, a lawyer representing Tesla shareholders, asked Musk if he “went with 420 because it was a joke your girlfriend enjoys.” Musk replied he thinks there is “some karma” around the number 420 — which is also a slang reference to marijuana — although he added he doesn’t know “if it’s good karma or bad karma at this point”.
He then said the number was a “coincidence” and it represented a 20 per cent premium of Tesla’s share price at the time.
After it became apparent that the money wasn’t in place to take Tesla private, Musk stepped down as Tesla’s chairman while remaining CEO as part of the SEC settlement, without acknowledging wrongdoing.
On Friday, Musk had testified he thinks it is possible to be “absolutely truthful” on Twitter. “But can you be comprehensive? Of course not.”
On Monday, he again emphasised: “My tweet was truthful, absolutely truthful.”
Asked by his lawyer, Alex Spiro, if he understood the charges against him, Musk said he’s being “accused of fraud. It’s outrageous”.
Shares of Tesla climbed US$8.76. or 6.6 per cent, to US$142.18 on Monday. He said he never deceived investors.
