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Elon Musk Tesla tweet test dives into investor losses up to $11 billion


SAN FRANCISCO — One Elon Musk tweets claiming that he has the finances to make it Tesla private in 2018 caused billions of dollars in damage to investors after the deal collapsed, according to estimates presented Tuesday at a court examining the messy handling of the proposed acquisition.

The staggering estimates produced by two experts hired by attorneys representing Tesla shareholders underscore the challenges the nine-person jury faces as the trial drags on for three weeks. ends this week. US District Judge Edward Chen is expected to turn the case over to a grand jury on Friday.

Depending on the ruling, Musk and the electric car maker he runs could face more financial damage because of his unpredictable behavior on the Twitter platform he currently owns. Without admitting any wrongdoing, Musk and Tesla achieved settle 40 million dollars with securities regulators after Musk’s troubling tweets in August 2018.

In this class action lawsuit on behalf of Tesla shareholders, jurors must first determine whether two tweets Musk abruptly posted on August 7, 2018 led Tesla investors in the wrong direction. or not. If a jury decides to hold Musk accountable for tweets that Chen was considered a liethey will face an even more formidable task – trying to count Musk – one of the richest people in the world – and Tesla paying the price for misleading tweets.

One of the two experts on Tuesday, the economist Michael Hartzmark, looked at a report that featured a variety of terms like “but-give” and “consequential inflation” that made a case for calculate losses suffered by Tesla shareholders over a 10-day period in August 2018 ranged from $4 billion to $11 billion, or $22.55 to $66.67 per share. Tesla votes at the time.

Another expert, University of Maryland finance professor Steven Heston, reviewed an even denser report analyzing the impact of Musk’s tweets on more than 2,000 Tesla stock options. is based on a formula known as the Black-Scholes model that is widely used by companies for pricing. executive compensation package.

When pressed by a lawyer for Musk about the reliability of his model, Heston admitted: “All models deviate from reality, which is why they are models.”

Heston, who said he was paid $300,000 to $350,000 for his work on the case, declined to try to give a specific estimate of investor losses, saying it was the job of the investors. jurors.

The crux of the case revolved around an August 7, 2018 tweet in which Musk stated “funding guarantee” ” to privatize Tesla. Musk abruptly tweeted a few minutes before boarding a private jet after being informed that the Financial Times was coming soon publish a story that Saudi Arabia’s Public Investment Fund spent about $2 billion buying a 5% stake in Tesla to diversify their interests beyond oil, according to his testimony.

Amid widespread confusion over whether Musk’s Twitter account was hacked hacked or he was joking, a few hours later Musk continued with another tweet suggests an impending deal.

While about eight hours of sworn testimonyMusk repeatedly asserted that he was in the best interests of shareholders and believed he had a funding commitment from the Saudi fund, but this pledge was withdrawn following the tweet “financially”. guaranteed assistance”. investors and sold some of his stock in SpaceX, the rocket ship company he founded.

After consulting with Tesla’s major shareholders, Musk has decided that the electric car maker should continue to be publicly traded – a decision that has benefited him and other investors. other investment. Tesla shares are now worth eight times what they were when Musk bought back the tweet, after adjusting for the two stock splits that have occurred since then.




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