Elon Musk said he believes he has enough financial backing to take Tesla private, both from Saudi Arabia’s sovereign wealth fund and his own stake in SpaceX, as he testified at a trial in an investor lawsuit claiming that his tweets on the matter cost them millions of dollars. USD.
On the second day of testimony in federal court in San Francisco, Musk said he believes “an agreement has been made” that the Saudi Arabia Public Investment Fund will support a possible effort to take Tesla private at $420 a share, a premium of about $20 per share. cents at the time, although he admitted there was no contract and many details remained unresolved.
Musk said the PIF has “many multiples” of what is needed to take Tesla private, especially since the PIF is not expected to buy the entire company, and added that his own stake in SpaceX, his rocket company, will be enough to make up for any shortfalls. “It’s important for the jury to know that,” he said.
The class action lawsuit brought by investors alleges that Musk artificially inflated Tesla’s stock price when he wrote on Twitter in August 2018 that he was considering privatizing the automaker. electricity at $420 a share and has “secured the capital” to do so. An agreement never materialized. Shareholders allege that the posts ended up causing them significant financial losses as the stock skyrocketed in response.
Musk has argued that his posts, which sent Tesla’s stock price soaring and ended the day up 11%, were based on conversations with backers from PIF and what he sees as a deal. agreed to “shake hands” to take the company out of the public market.
When asked about a possible reaction to the tweet, Musk, looking stern in a dark suit with dark tie, told the packed courtroom that “it’s hard to say” whether Tesla stock Will the market go up or down when the market can act “in the opposite direction”. intuitive ways”.
But he admits the stock price will likely skyrocket. “I was predicting that (probably) there would be some stock rally – it seemed likely. If you say you are considering privatizing a company or acquiring a . . . There will be some premium. . . In this case, I have a clear idea of what the premium would be.”
Musk testified that his tweet was based on “a snap decision” after he was informed that the Financial Times was writing an article about PIF’s $2 billion acquisition of Tesla shares. He described it on Monday as a “push factor” behind the tweet.
The shareholders’ attorneys tried to portray the tweet as a non-serious proposition and suggested a $420 price tag based on a joke his girlfriend at the time found funny – 420 was a term commonly used for cannabis. Musk disagreed, saying he was applying a 20% premium to the stock, then rounding up a bit.
“There was some karma around 420, though I question (whether it is) good or bad karma at this point,” he added.
The billionaire emphasized that the tweet said he was “considering” taking Tesla private and should not have considered it a definitive deal.
Nicholas Porritt, an attorney for shareholders, pointed out that Musk had not discussed any of the proposals with Tesla’s board of directors in advance. But the billionaire argues that is not true: “I, as a bidder, are not allowed to discuss the details with the board of directors because it represents the partner. So it would be collusion if I discussed the details with the board.”
Musk and Tesla paid US regulators a total of $40 million for the tweet.