Elon Musk’s next drama: A trial over his tweets on Tesla | Business and Economy News
The trial of the Tesla boss’s old tweets that he raised money to take the car company private will begin on Tuesday.
While still grappling with the fallout from the company he bought privately, beleaguered billionaire Elon Musk is now facing a trial against a company he doesn’t own.
Long before Musk bought Twitter for $44 billion in October, he had his eye on Tesla, the electric car maker where he continues to serve as CEO and from which he acquired most of his fortune and fame. his language.
Musk stated in a tweet August 7, 2018 that he lined up finance to pay for a $72 billion Tesla acquisition, which he then amplified with a follow-up statement that makes a deal seem imminent.
But the acquisition never materialized, and Musk will now have to explain his actions by oath in US federal court in San Francisco. The trial began Tuesday with jury selection, triggered by a class action lawsuit on behalf of investors who owned Tesla stock over a 10-day period in August 2018.
Musk’s tweets then fueled a rally in Tesla’s stock that abruptly ended a week later, after it became clear he didn’t have enough money to buy it back. That led to him canceling plans to privatize the automaker, culminating in a $40 million deal with US securities regulators that also required him to resign as company president.
Musk has since alleged that he entered into the deal under duress and asserted that he believed he had blocked financial support for the Tesla acquisition during meetings with representatives from the hedge fund. public of Saudi Arabia.
The outcome of the trial could hinge on the jury’s interpretation of Musk’s motives for the tweets that US District Judge Edward Chen decided were untrue.
Chen caused another setback for Musk on Friday when he turned down Musk’s offer to move the trial to federal court in the state of Texas, where Tesla moves its headquarters in 2021. California.
wide scope
Musk’s Twitter leadership – where he has gutted staff and alienate users and advertisers – has proven unpopular with existing Tesla shareholders, who worry that he has spent less time running the automaker at a time stiff competition. Those concerns contributed to 65 percent Tesla’s stock drop last year wiped out more than $700 billion in shareholder wealth — far more than the $14 billion wealth swing that occurred between the company’s high and low stock prices between the 7th and the 6th. August 17, 2018 is mentioned in the class action.
The lawsuit is based on the premise that Tesla shares would not have traded to such a wide range had Musk not raised the prospect of buying the company at $420 a share. Tesla’s stock has split twice since, making that $420 price worth $28 on an adjusted basis today. Shares closed last week at $122.40, down from their November 2021 split-adjusted high of $414.50.
After Musk abandoned his intention to buy Tesla, the company fixed a production problem, leading to a rapid increase in auto sales that sent the company’s stock skyrocketing and made Musk the richest person in the world for the time being. until he bought Twitter. Musk dropped from the top spot on the wealth list following a stock market backlash over his handling of Twitter.
The trial is likely to provide insight into Musk’s management style, as the witness list includes several current and former top Tesla executives and board members, including including such celebrities as Oracle co-founder Larry Ellison as well as James Murdoch, son of media mogul Rupert Murdoch. The film could also shed light on Musk’s relationship with his brother, Kimbal, who is also on a list of potential witnesses who could be summoned in the trial slated to last until February 1. .
