Bermuda Post

Tuesday, Mar 28, 2023

Elon Musk and Tesla going on trial over claims his tweets cost investors billions of dollars

Elon Musk and Tesla going on trial over claims his tweets cost investors billions of dollars

Elon Musk, who has since bought Twitter, caused a stir on the social media platform in 2018 when he claimed he had secured funding to take Tesla private.
Elon Musk and Tesla are set to go on trial over allegations that shareholders were defrauded out of billions of dollars by his tweets.

The company's chief executive wrote in 2018 that he had "secured" funding to take the electric carmaker private and later that investor backing was "confirmed", causing shares to soar and then fall.

Less than three weeks later, Musk backtracked on the plan.

Investors who bought or sold stock in the days after the tweets are seeking unspecified damages, but have claimed Musk's tweets cost them "billions".

Seven current and former Tesla directors are among the defendants, who have denied any wrongdoing.

Mr Musk - who was forced to step down as company chairman after a $40m (£32.5m) settlement with the US regulator - may take the stand in the case, according to court documents.

Opening arguments could begin in San Francisco on Tuesday, once the jury has been selected.

The judge, Edward Chen, denied a request by Musk to have the case moved to Texas last week, with the billionaire expressing concern that potential jurors in California would be bias against him.

He cited negative media coverage of the thousands of jobs he has cut at Twitter, which is based in San Francisco, following his takeover of the social media platform last October.

The jury will be tasked with deciding whether Musk's tweets influenced investors, whether he acted knowingly, and whether damages should be awarded.

Judge Chen has already ruled that the statements the SpaceX owner made were untrue, but the defendants will argue that he had good reason to believe funding for taking Tesla private was secured.

The trial, which comes against the backdrop of sliding shares in the company, is tipped to last three weeks.
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