Elon Musk tells court Saudi Arabia wanted to privatize Tesla, $420 ‘no longer a shaggy dog story’

Elon Musk tells court Saudi Arabia wanted to privatize Tesla, $420 ‘not a joke’

Elon Musk testified on Monday that he believed he secured funding to take Tesla Inc. private in 2018, both from a Saudi investment fund and its stake in SpaceX, and one of his key tweets about it was “absolutely true”.

Tesla’s chief executive has resumed testimony at a federal trial in San Francisco over investor losses allegedly caused by tweets he made in 2018, including his “funding secured” tweet.

Representatives of Saudi Arabia’s sovereign wealth fund “were unequivocal about the way forward,” Musk said. He also mentioned his large stake in private aerospace company SpaceX, and that “alone meant that funding was secured.”

Musk appeared flustered at times during the hours-long questioning by the plaintiff’s lead attorney, Nicholas Porritt.

Asked about texts between him and Yasir Al-Rumayyan, the sovereign wealth fund’s top executive, Musk said the texts were basically “ass-covering, for lack of a better word” from the Saudi executive.

Musk said he became “angry” and “very upset” by Al-Rumayyan’s “backsliding”, a word Musk repeated repeatedly. “Anyone would be mad about that,” Musk said.

“My tweet was truthful, it was absolutely truthful,” Musk said, referring to the “Funding Secured” tweet. Not just because of the deal with the Saudi fund but also because of SpaceX, Musk repeated.

Last year, Musk sold shares of Tesla to buy Twitter Inc., and “I would have done the same here,” he said.

Earlier this afternoon, when cross-examined by his attorney, Alex Spiro, Musk said he had “never” tried to deceive Tesla shareholders, and had SpaceX as a model to ensure their continued investment in a Private Tesla.

“I thought it would be good for shareholders to take Tesla private,” Musk said. “We were under an unprecedented attack from short sellers.”

Under Spiro’s prompt, Musk also referenced a previous deposition and said Google’s parent company Alphabet Inc. GOOGL,

had an “ongoing interest” in buying Tesla, which factored into his idea to privatize the electric vehicle maker at the time.

Shares rose on Monday as Musk’s testimony began, ending the trading day up 7.7% and at their highest level since Dec. 19. The stock traded as high as $143.50, its highest intraday price since Dec. 20.

Musk told the court that the $420 per share price on the deal “was coincidental” because it was about a 20% premium to Tesla’s stock price at the time. , and “not a joke”.

In some circles, the number 420, pronounced four-20, refers to marijuana use.

Plantiff’s attorney, Porritt, also asked several questions that led Musk to say he hadn’t spoken to major Tesla shareholders such as Baillie Gifford and T. Rowe Price about taking Tesla private. Musk also said he didn’t recall details about his discussion with the board about the plan.

Tossing the now-famous ‘Funding Secured’ tweet was a way to stay ahead of a soon-to-be-launched project Financial Times article about the Saudi fund taking a large stake in Tesla and as a way to keep all Tesla investors informed, Musk said. Additionally, he tweeted that he was “considering” the move, “not saying it would be done,” Musk told the court.

Musk gave brief testimony Friday before the court adjourned for the day, being careful to point out that his tweets aren’t always taken literally. The trial began last week and is expected to continue in February.

“Just because I tweet something doesn’t mean people believe it or act on it,” Musk told a defense attorney on Friday.

The lawsuit revolves around Musk’s tweets from August 2018, including one where he told his millions of Twitter followers that he was “considering taking Tesla $420 private,” then added “secured funding.” The plan then failed.

Investor Glen Littleton, the lead plaintiff in the case, alleges he lost money due to the fake tweets and seeks damages.

US District Judge Edward Chen has previously ruled that Musk’s tweets about Tesla privatizing were not true and that Musk acted recklessly.

However, it is still up to the jurors to decide whether the tweets were material to investors and whether the lies caused investors losses.

The CEO and Tesla were each fined $20 million in September 2018 by the SEC to settle civil charges around the “funded” tweets and Musk was stripped of his role as chairman at Tesla.

Musk and Tesla have agreed to settle the charges against them without admitting or denying the SEC’s allegations.

Musk’s offer to end the SEC’s settlement agreement over Tesla’s tweets was rejected last year.

Tesla shares have lost 55% in the past 12 months, compared to losses of around 9% for the S&P 500 SPX index,