Elon Musk testified in federal court Friday in a civil jury trial that may decide whether a tweet he sent in 2018 cost Tesla investors millions of dollars.
Tesla (TSLA) shareholders are suing the company over losses they say they suffered when Musk tweeted he had "secured" money to take the company private at $420 per share.
Musk, who bought Twitter on Oct. 27 for $44 billion, has a history of tweeting on the social media site long before he owned the company. The tweet In question, on Aug. 7, 2018, already cost him millions in Securities and Exchange Commission fines and forced him to step down as Tesla chairman.
Musk reached a settlement with the SEC on Sept. 29, 2018, which required the CEO and Tesla to each pay a $20 million fine and for Musk to step down as chairman for tweeting that he could take Tesla private at $420 per share and buy out the company for $72 billion.
The Costly Tweet
"Am considering taking Tesla private at $420. Funding secured." Musk tweeted on Aug. 7, 2018.
This so-called “secured funding” tweet is at the heart of the trial, which began this week in San Francisco.
According to one published report, Musk testified Friday, “I care a great deal about retail investors. … They are our most loyal steadfast investors.”
Musk said in court that Twitter is the most democratic way to communicate, according to a report from MarketWatch.
The tech entrepreneur also was quoted as saying “Just because I tweet something, it does not mean people believe it, or act accordingly.
According to media reports, Alex Spiro, an attorney for Musk, said in court Wednesday that the 2018 tweet was "a split-second decision" meant to show Musk was being transparent about talks with Saudi investors on a possible deal. “He didn’t plan to tweet this,” Spiro said.
NBC reported Nicholas Porritt, an attorney representing lead plaintiff Glen Littleton, 71, of Kansas City, Mo., as well as other Tesla shareholders, said Musk defrauded them. “His lies caused regular people like Glen Littleton to lose millions and millions of dollars,” Porritt said, adding that the tweet also hurt pension funds.
According to a report Friday from Reuters, Musk testified about the struggles Tesla was facing, particularly from short-sellers. "A bunch of sharks on Wall Street wanted Tesla to die, very badly," he said.
Musk was on the stand only for a short time Friday afternoon, but is expected to continue his testimony when the trial resumes Monday morning.