Elon Musk defends 'funding secured' tweets in Tesla shareholder trial
Elon Musk said that just because he tweets something, it "does not mean people believe it or will act accordingly." The Tesla chief took the witness stand in a San Francisco federal court to defend himself (and the tweets he made back in 2018) in a lawsuit filed by a group of the automaker's shareholders. "I think you can absolutely be truthful but can you be comprehensive? Of course not," he added, regarding Twitter's character limits. If you'll recall, Musk famously tweeted in August 2018 that he was "considering taking Tesla private at $420" and that he was already able to secure funding. "Investor support is confirmed," he said in a follow-up tweet.
The CEO later revealed that he was in talks with Saudi Arabia's Public Investment Fund, which reportedly expressed interest in Tesla as part of the country's bid to lessen its reliance on oil. However, the deal didn't materialize, and he later penned a lengthy post on the automaker's website to say that it's staying public.
As CNBC notes, shareholders blamed those "funding secured" tweets for their significant financial losses, leading them to file a class action lawsuit against Musk. Tesla's shares apparently remained highly volatile in the weeks that followed. The executive, however, downplayed his tweets' impact and said that they don't necessarily affect stock prices: "There have been many cases where I thought that if I were to tweet something, the stock price would go down. For example, at one point I tweeted that I thought that, in my opinion, the stock price was too high...and it went went higher, which was, which is, you know, counterintuitive."
In addition to the shareholder lawsuit, the Securities and Exchange Commission sued Musk over his tweets, calling them "false and misleading statements" that could be constituted as fraud. Musk and Tesla paid $20 million each to settle with the SEC, and the executive had to step down as board chairman. The SEC also required company lawyers to approve any Tesla-related tweet Musk makes — a condition the CEO tried (and failed) to get out of last year.
Aside from defending his tweets, Musk criticized short sellers during his testimony, telling the court that short-selling "should be made illegal." He added: "It is a means for, in my opinion, bad people on Wall Street to steal money from investors. Not good." Another piece of information to take away from his time on the witness stand is that nobody can tell Musk to stop tweeting. When lawyers asked him about the advice he got to refrain from posting on Twitter after calling a British cave diver a "pedo guy," Musk said: "I continued to tweet, yes."
According to Reuters, Musk only testified for less than 30 minutes and that he's not done answering lawyers' questions. He's expected to take the witness stand again to explain why he wrote the funding tweets and why he insisted that he had Saudi Arabia's backing.