In the process of fraud allegations by investors against Tesla boss Elon Musk, the tech billionaire himself was called to the witness stand. However, not much came of it at first: About half an hour after the beginning of Musk’s questioning by the plaintiff’s lawyer, the court adjourned yesterday until Monday.
The case relates to Musk’s August 2018 tweet rushing to announce that he intends to delist the electric car company and has secured funding to do so. Later it turned out that there were no firm commitments from investors. Investors are basing their class action lawsuit against Musk and Tesla’s board of directors on this. The false tweets triggered price swings that caused them to lose money, they argue.
Insights into line of defence
The short time on the stand allowed some insight into Musk’s line of defense. He insisted that the 240-character length of the Twitter messages did not allow for detailed explanations.
His lawyer had already said in the opening statement that the phrase “funding secured” was only due to an unfortunate choice of words under time pressure, while Musk meant something else. The lawyer for the plaintiffs reminded the Tesla boss in the survey that he also had to provide correct information about his company on Twitter.
At the same time, Musk tried to question the general impact of his tweets on investors. “Just because I tweet something doesn’t mean people will believe it or act on it,” he said. He once wrote on Twitter that he thought Tesla shares were too expensive – and the price continued to rise afterwards, Musk said. In fact, on the day in May 2020 after Musk’s tweet, the stock had initially fallen over 10 percent before later bouncing back.
The plaintiff’s attorney also pointed out that in July 2018, people close to him recommended that Musk tweet less or not at all. The 51-year-old initially said he couldn’t remember. But after reading statements from his confidants “to refresh his memory”, he did not deny it. He obviously didn’t comply, Musk said.
