Elon Musk on the stand to defend himself against fraud charges
Sylvie Claire / January 22, 2023
Elon Musk took the stand Friday in San Francisco in a trial in which he is accused of fraud by investors for tweeting more than four years ago that he planned to take Tesla private.
Dark suit, white shirt, he was sworn in early afternoon for a testimony that could extend Monday.
The boss of Tesla - and of Twitter, since late October - had created the shock on August 7, 2018 by saying that he wanted to take his car group off the stock market at a price of $ 420 per share, and then that the financing was « secured"
Elon Musk, (then) CEO of Tesla, lied, and his lies caused people to lose millions of dollars," Nicholas Porritt, a lawyer for the plaintiffs, investors gathered in a class action suit, said Wednesday.
On August 10, 2018, they had filed a complaint against the business leader, for "artificially manipulating the price of Tesla's stock in order to completely ruin investors" who were betting on the price decline.
The tweet was written "in a hurry", the choice of words was "imprudent", but "it is not a fraud", hammered for his part Alexander Spiro, the lawyer of the billionaire.
He assured Wednesday that Elon Musk had the intention to take Tesla out of the stock market, and did not doubt the financing, thanks to assurances of the Saudi sovereign fund.
The operation had not succeeded.
The billionaire's proposal was "incomplete, inconsistent and illusory in some respects," Guhan Subramanian, a Harvard professor and specialist in such transactions who was called to testify by the plaintiffs, said Friday.
He pointed to the lack of board oversight of Elon Musk's tweets, the "lack of consultation" with lawyers and bankers, and the "one-sided announcement" on Twitter to demonstrate how the Tesla boss's approach diverged "extremely" from the usual process.
One of the plaintiffs, Timothy Fries, said he invested in Tesla the day after the famous tweets.
To him, the "secure funding" message meant that Elon Musk "had a partner who was committed and approved for funding."
But the stock price plummeted in the following days. "I lost $5,000. I hope to recover my losses," Fries said.
Tesla's stock had jumped to $386.48 just after the tweets. On August 16, it had fallen back to 335.45 dollars, according to figures given to the jury on Tuesday by Judge Edward Chen, far from the 420 dollars per share mentioned by Musk.
The trial is scheduled to last three weeks. In a previous ruling related to this case, the judge found that the famous 2018 tweet could be considered "false and misleading.