Elon Musk wins lawsuit against Tesla shareholders over 2018 ‘funding guaranteed’ tweet (NASDAQ: TSLA)
Scott Olson
A jury in San Francisco ruled Friday in favor of Tesla founder Elon Musk in a shareholder class action lawsuit over his 2018 “funding secured” tweets. in which the businessman claims to have enough money to buy Tesla (NASDAQ:TSLA) private.
“Thank goodness, human wisdom prevailed!” musk tweeted Friday after jurors in a federal civil trial were found on his behalf. “I appreciate the jury’s consensus on innocence in the Tesla private case 420.”
Class action attorney representing Tesla shareholders (TSLA) is sued for a August 7, 2018, tweet in which Musk wrote: “I’m considering privatizing Tesla for $420. Capital secured.”
The tweet sent TSLA 11% jump up to $387.46 that day, though the stock didn’t reach $420 when the idea of private trading was born. It turns out that while Musk has talked to Saudi investors about financing a private deal, that funding isn’t actually “safe”.
The last TSLA stock sank up to about 35% on the day a month after Musk’s tweet and the private sale never go forward.
Attorneys representing shareholders argue that Musk unfairly pushed TSLA’s share price higher by exaggerating the soundness of financing for the deal. If they had won, a court could have ordered Musk to pay billions of dollars in damages.
The former US Securities and Exchange Commission also sue Musk on the case, obtain a settlement out of court where he and Tesla (TSLA) was once paid $20 million, and Musk stepped down as chairman of the electric-car maker. Friday’s jury verdict came in an unrelated case brought on behalf of individual shareholders.
musk last month witness to defend himself at trial in San Francisco, saying the Saudi investors he spoke to “obviously” wanted to help take the company private.
And while Tesla (TSLA) initially fell when the private sale was broken, the stock then began a multi-year rally. In November 2021, TSLA hit a peak of about 1,500% from August 7, 2018, the high after factoring the stock split.
Even with TSLA’s massive pullback over the past year, the stock closed Friday at $189.98, representing a gain of more than 635% from its August 7, 2018 intraday high after when it comes to stock splits.
Search for Alpha Contributors segmented by where Tesla (TSLA) go from here. Investment Research column Alpha recently launched a Case “Buy” for stock, while contributor Sean Chandler gave TSLA a Reviews “Sell”.
