SAN FRANCISCO (AP) — Elon Musk is back in federal court to defend himself against a class action lawsuit alleging he misled Tesla shareholders with a tweet about an aborted purchase that the billionaire defiantly insisted Tuesday he could have opted out, if he wanted to.
Musk spent nearly three more hours on the stand during the third day of testimony before being excused by US District Judge Edward Chen. It is unlikely that Musk, 51, will be called back to the witness stand during a civil trial that is expected to be delivered to a nine-person jury in early February.
Musk, who also owns Twitter while continuing to run Tesla, spent much of Tuesday portraying himself, while being grilled by his attorney Alex Spiro, as an impeccably trustworthy business leader capable of raising as much money as he needs to follow through on his vision. He quarreled openly with a shareholder’s lawyer, Nicholas Poret, who had infuriated him earlier in the trial.
In two separate turns on Tuesday under Spiro’s gentle prodding, Musk left no doubt about his disdain for Porritt with a note expressing suspicion that the attorney was looking out for the best interests of Tesla shareholders. These remarks prompted a swift reprimand from the judge and she was expunged from the record. “It’s inappropriate,” Chen Musk warned at one point.
When challenged by Porritt, Musk purposefully diverted his gaze from the attorney and gave his explanations while looking directly at the jurors seated a few feet to his right. In another instance, Musk asserted, without elaborating, that a question from Porritt wondering if he ever caused investors to suffer losses contained “lies.”
On the flip side, Spiro addressed Musk at one point as “Your honor” while asking the billionaire how much money he’s made for investors over his career. The slip-up sparked a moment of distress in a San Francisco courtroom packed with media and other onlookers to hear about Musk, who has become more popular since completing the $44 billion purchase of Twitter in October.
The current trial hinges on whether a pair of tweets Musk posted on August 7, 2018 hurt Tesla shareholders over a 10-day period that led to him admitting that the takeover he had envisioned would not happen. These statements resulted in Musk and Tesla reaching a $40 million settlement without admitting any wrongdoing.
Musk said in the first tweets of 2018 “Funding secured” It wouldn’t have been $72 billion — or $420 per share — to buy Tesla at a time when the electric car maker was still having production problems and was worth a lot less than it is now. Musk followed up a few hours later with another tweet indicating that a deal was imminent.
After those tweets, Musk announced that Tesla would be staying public a few weeks later. A month later, Musk and Tesla reached a $40 million settlement with securities regulators who alleged the tweets were misleading.
Musk previously claimed he entered the settlement under duress and has maintained that he was never wavering in his belief that he had the money to close a deal.
Musk spent most of Tuesday trying to convince jurors that there was nothing disingenuous about the two tweets suggesting he had raised money to take Tesla private because the electric car maker had production problems and was worth much less than it is now. The judge has already announced that the jury can consider both of these tweets to be false, leaving them to decide whether Musk knowingly deceived investors and whether his statements saddled them with losses.
While being directed by Spiro, Musk told jurors that he only stated he was “considering” buying Tesla but never promised a deal. But Musk thinks it’s important to get the word out to investors that Tesla may be about to end its eight-year operation as a public company.
“I didn’t have a bad motive,” Musk said. “My goal was to do the right thing for all stakeholders.”
During his interrogation the day before by Burritt, Musk was at times combative, grumpy, and angry. Through it all, Musk insisted he booked financial backing for what could have been a $72 billion buyout of Tesla during 2018 meetings with representatives from Saudi Arabia’s Public Investment Fund, though no specific amount or price for the financing was discussed.
When presented with texts and emails indicating that a representative of the Saudi fund never pledged the money to buy Tesla outright, Musk maintained that they were nothing more than the words of someone trying to walk back an earlier pledge made in private conversations.
Shortly after Porritt resumed his questioning on Tuesday, Musk once again scoffed at the idea that his belief that he had received financial backing from Saudi financing wasn’t enough for him to tweet about a potential Tesla purchase.
“We’re talking about Saudi Arabia,” Musk testified. “They could buy a Tesla many times over. It wasn’t a lot of money for them.”
Musk also reiterated his earlier testimony that he could finance the Tesla purchase by sharing some of his holdings in SpaceX, a private rocket ship maker he also started. This would be similar to what he did with the Twitter purchase, which prompted him to sell about $23 billion of his Tesla stock.
It’s something Musk said on Tuesday he doesn’t want to do, but it showed he had enough to raise purchases for expensive deals. Musk’s ownership of Twitter has also proven unpopular with Tesla shareholders who worry about distracting him as the automaker faces more competition. Tesla stock has lost about a third of its value since Musk acquired Twitter.
Despite this decline, the stock is still worth about seven times more than it was at the time of Musk’s 2018 tweets, adjusting for two splits that have occurred since then. That opened the door for Musk to remind the jury on Tuesday that any investor who owned Tesla stock in August 2018 would have done “extremely well,” had they just held the stock.
“It would have been the best investment in the stock market,” Musk said.