Elon Musk Begins Legal Trial — Elon Musk, CEO of Tesla, is facing a legal trial over a tweet he sent in 2018 where he stated his intentions to take the company private in a $72 billion buyout. The trial, which is set to begin on Tuesday, is brought by Tesla shareholders who claim that the tweet manipulated the company’s share price.
In the tweet, Musk stated that he had “funding secured” to take the carmaker private, but it was later found out that the funding was not secured and Tesla remained a public company. Shareholders argue that they lost billions of dollars as a result of the tweet, as the share price dropped significantly.
The shareholders are seeking damages from Musk, who has argued that he believed he had secured funding from Saudi Arabia’s Investment Fund and did not commit securities fraud. If the jury rules in the shareholders’ favor, Musk may be ordered to pay billions of dollars in damages. He has already paid $20 million to the Securities Exchange Commission (SEC) for the tweet and Tesla also had to pay another $20 million. As a result of the tweet, the SEC also removed Musk as chairman of Tesla.
This tweet has become infamous in Silicon Valley as it highlighted the power of social media in shaping the market and its effect on the company’s share price. Legal experts believe that the case will be difficult for Musk to win, as the fine he paid to the SEC will be used against him in the trial. However, jury trials in cases of fraud are notoriously difficult to predict.
Musk had requested the trial to be moved to Texas, arguing that a fair jury could not be found in San Francisco. He argued that mass sackings at Twitter, a company he acquired last year, affected many employees in San Francisco, and that he is not popular in the city. Musk’s team argued that a significant majority of potential jurors said they viewed the billionaire negatively. However, the judge ruled that the trial would proceed in California.
The trial may see Musk giving evidence under oath, and the witness list includes Oracle’s CEO Larry Ellison and media tycoon James Murdoch. The trial could give insight into the inner workings of the company and the decision making process of its CEO, which could have long term effect on the company’s future.