Elon Musk claims that his 2018 tweet on plans to take Tesla Inc. private was “completely true,” and that those who feel it was a hoax are mistaken.
Lawyers for the electric-car maker’s billionaire CEO claimed in a court filing Tuesday that Saudi Arabia’s sovereign wealth fund had agreed to back his bid to take the firm private.
According to the extensively redacted brief by attorney Alex Spiro, “Elon Musk’s August 7, 2018 tweet telling the public that he was considering taking Tesla private was totally true.” “Mr. Musk was thinking about taking Tesla private at $420 per share.” Funding was obtained. Investors were on board.”
The tweet shook the company’s stock, prompting the Securities and Exchange Commission to sue Musk for fraud. Musk and Tesla reached an agreement with the agency, agreeing to pay a $40 million punishment.
Shareholders argue that Musk’s tweets triggered dramatic swings in the company’s share price, resulting in billions of dollars in losses, in class-action litigation pending in federal court in San Francisco.
The investors are seeking a judge’s decision that the tweets were misleading representations, ahead of a trial scheduled for May 31. A hearing is planned for March.
“Not only did Mr. Musk assume funding was secured when he tweeted, but in reality (based on Mr. Musk’s interactions with the PIF), it was not “secured,” according to Spiro’s declaration, referring to Saudi Arabia’s Public Investment Fund.
Tesla’s stock soared by up to 13% following the take-private tweet, punishing short-sellers who hadn’t covered their holdings. Other investors who misinterpreted Musk’s comments as a buy signal suffered losses when questions about Musk’s ability to follow through mounted and the company’s share price dropped.
A few weeks later, Musk revealed that Tesla will remain public in a Friday night blog post.
The case is In re Tesla Inc. Securities Litigation, 18-cv-04865, filed in the United States District Court for the Northern District of California (San Francisco).
