Search

Elon Musk Says He Could Have Raised Funds to Take Tesla Private - The New York Times

Mr. Musk testified in a lawsuit filed by investors who claim his 2018 statements about a plan to buy up the carmaker’s stock cost them billions.

Elon Musk said on Monday that he had not lied or misspoken about his plan to take Tesla off the stock market in 2018, testifying in federal court that Saudi Arabia’s sovereign wealth fund had “unequivocally wanted to take Tesla private.”

Investors are suing Mr. Musk, Tesla and the company’s board because they contend that they lost money as a result of Mr. Musk’s statements about his plan to take Tesla private, which later collapsed.

On Aug. 7, 2018, Mr. Musk, who was chairman and chief executive of the electric automaker at the time, wrote on Twitter: “Am considering taking Tesla private at $420. Funding secured.” He then wrote: “Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote.” Tesla’s share price jumped after those posts but later fell as the proposal fizzled out.

How jurors interpret Mr. Musk’s statements and the effect they had on investors could be critical to the outcome of this case, which is being tried in San Francisco. A victory for investors could mean Mr. Musk and Tesla would have to pay billions of dollars in damages. But winning the case would allow Mr. Musk to claim vindication against his critics.

The judge overseeing the case, Edward M. Chen, has already ruled that “funding secured” and Mr. Musk’s second statement about taking Tesla private were untrue.

Mr. Musk has thus far testified for about four hours in this trial and is due back on the stand on Tuesday. He answered Monday’s questions about the Saudi fund, the Public Investment Fund, from a plaintiffs’ lawyer who pressed him for more details about the plan to take the company private. Mr. Musk said officials from the Saudi fund had not signed documents committing to a deal or discussed how much they would invest in the deal.

“The exact amount would not be knowable without knowing who else would participate,” he said. But he added that he had believed “if they say they’re going to do something, they do.”

Removing a public company from the stock exchange can be expensive and difficult. The people or investment firms seeking to take a business private have to come up with the money to buy all or most of its stock.

The Saudi fund, which had amassed a 5 percent stake in Tesla before Mr. Musk announced his plans, would have been an important part of any deal. Mr. Musk had long claimed the Saudi investors were committed to the transaction.

Text messages between Mr. Musk and Yasir Al-Rumayyan, who oversees the Saudi fund, emerged last year in court filings. In those messages, Mr. Musk criticized Mr. Al-Rumayyan after news reports suggested that the fund was lukewarm about a deal. Mr. Al-Rumayyan said in the texts that Tesla and Mr. Musk had not provided enough information for the fund to proceed. Mr. Musk referred to Mr. Al-Rumayyan’s texts as “backpedaling.”

Mr. Musk and Tesla’s legal team unsuccessfully tried to compel the fund’s employees to testify in the trial. This month, the fund’s lawyers called the subpoenas “legally deficient” and “frankly, frivolous.” A spokesman for the fund did not immediately respond to a request for comment on Monday.

Mr. Musk testified that “funding secured” referred not just to financing from the Saudi fund but also to his stake in SpaceX, the rocket company where he is also chief executive. Mr. Musk could theoretically have borrowed against his stake in SpaceX or sold some of that stock to come up with the money needed to take Tesla private.

“This is an extremely important point, and you seem to be deliberately avoiding it,” Mr. Musk said to Nicholas Porritt, a lawyer for the plaintiffs. But under questioning from Mr. Porritt, Mr. Musk acknowledged that he had not mentioned his SpaceX shares as a potential funding source in a 2021 deposition. He later said he had mentioned using those shares in a deposition that was part of an investigation by the Securities and Exchange Commission into Mr. Musk’s efforts to take Tesla private.

Plaintiffs claim that Mr. Musk’s statements about taking the automaker off the stock market caused them to lose money on Tesla shares.Drew Angerer/Getty Images

When asked whether he had priced Tesla at $420 per share because it would be “a joke your girlfriend would enjoy,” Mr. Musk said, “There is some karma around $420, though I should question whether that is good or bad karma at this point.” He then added that he had picked $420 because it was about 20 percent more than Tesla’s share price at the time.

Mr. Musk, wearing a dark suit and black surgical mask, entered the courtroom and walked straight to the witness stand. He watched the jurors as they walked in and nodded to them. Mr. Musk, who said that he “had trouble sleeping last night” and that his back was hurting, sometimes pushed back at how Mr. Porritt asked questions. Judge Chen told Mr. Musk at least three times that he had not answered the lawyer’s questions or had gone off topic.

The plaintiffs’ lawyers have argued that people made investment decisions because Mr. Musk said he had obtained the funding needed to take Tesla private and had investor support for the deal. But lawyers for Mr. Musk and Tesla have said it is possible investors made decisions based on Mr. Musk’s statement that he was considering taking Tesla private — a statement his lawyers claim was true.

Legal experts have said most companies and chief executives would probably have settled a case like this. But Mr. Musk has often shown a willingness to let lawsuits filed against him and Tesla go to trial.

In testimony on Friday, Mr. Musk acknowledged that his Twitter account provided important information about Tesla and that it had to follow S.E.C. rules. But he said his social media posts did not necessarily cause swings in Tesla’s share price. He also said he couldn’t be as comprehensive on Twitter as Tesla could be in S.E.C. filings and news releases.

Mr. Musk also said his friends, as well as Tesla’s executives and investors, had suggested that he take a break from Twitter before he posted about taking Tesla private.

In 2018, Mr. Musk and Tesla settled a separate lawsuit with the S.E.C. about his proposal to take Tesla private. They paid fines to the S.E.C., and Mr. Musk agreed to resign as Tesla’s chairman and to allow a lawyer to review certain statements about the company before Mr. Musk posted them on social media.

The trial started three months after Mr. Musk acquired Twitter. Since then, he has fired most of its employees, changed its content rules and allowed previously barred or suspended users back onto the platform.

Soon after efforts to take Tesla private ended in 2018, the company began to produce large numbers of cars, which drove its stock higher and made it easier for Tesla to raise billions of dollars by selling shares. But the company’s share price plunged last year as Mr. Musk sold shares to finance his acquisition of Twitter and as Tesla faced stiffer competition.

Adblock test (Why?)

Article From & Read More ( Elon Musk Says He Could Have Raised Funds to Take Tesla Private - The New York Times )
https://ift.tt/nkXwbiW
Business

Bagikan Berita Ini

0 Response to "Elon Musk Says He Could Have Raised Funds to Take Tesla Private - The New York Times"

Post a Comment


Powered by Blogger.