Elon Musk’s mysterious ways exposed in Tesla tweet lawsuit

Elon Musk’s mysterious ways exposed in Tesla tweet lawsuit

SAN FRANCISCO (AP) — Elon Musk’s enigmatic personality and unconventional tactics emerge as centerpieces in a lawsuit involving one of his most polarizing activities — tweeting.

The lawsuit, centered on a pair of tweets announcing Musk got the money to privatize Tesla in 2018, dragged the 51-year-old billionaire into a federal courtroom in San Francisco for three days of testimony that opened a peephole in his often impenetrable thought.

Musk, who now owns the Twitter service he deploys as his megaphone, was often a study in contrast during his roughly eight hours on the stand. The electric carmaker’s CEO is facing a class action lawsuit filed on behalf of Tesla shareholders after Musk tweeted about a corporate takeover that didn’t happen.

Both through his testimony and the evidence surrounding him, Musk came across as hot-headed, hot-headed, combative, and dismissive of anyone who questioned his motives as a groundbreaking entrepreneur who inspired comparisons to the late co-founder of Apple, Steve Jobs.

At other times, Musk looked like the shrewd visionary his followers hail — a fearless rebel who, by his own estimates, has raised more than $100 billion from investors. They have been richly rewarded by his leadership of pioneering companies such as PayPal in digital payments, Tesla in electric vehicles and SpaceX in rockets.

“It’s relatively easy for me to get investment support because I have an extremely good track record,” Musk observed wryly.

But his confidence in his ability to get the money he wants to pursue his plans is one of the reasons he ended up in court. The three-week trial is scheduled to resume on Tuesday and head to jury deliberations on Friday.

Here’s what you need to know so far:


Evidence and testimonials have shown that Musk began considering taking Tesla private in 2017 so he wouldn’t have to worry about the headaches and distractions that come with running a publicly traded company.

After a July 31, 2018 meeting with a senior representative of Saudi Arabia’s sovereign wealth fund, Musk sent a letter to Tesla’s board of directors explaining why he wanted to take the automaker private at a price of $420 per share, or about 20% off. above its stock price. at the time.

Musk was serious enough to have already discussed the pros and cons with Michael Dell, who went through the transition from public to private in 2013 when he led a $25 billion takeover of the personal computer company bearing his name. , according to the trial evidence. .


The crux of the matter hinges on a tweet from August 7, 2018 in which Musk said “Assured funding” to privatize Tesla. Musk abruptly posted the tweet minutes before boarding his private jet after being alerted that the Financial Times was about to publish a story that the Saudi Public Investment Fund had spent around $2 billion on buy a 5% stake in Tesla to diversify its interests beyond oil, according to his testimony.

Amid widespread confusion over whether Musk’s Twitter account had been hacked or he was joking, Musk followed up hours later with another tweet suggesting that a deal was imminent.

Musk defended the initial tweet as a well-intentioned move to ensure all Tesla investors knew the automaker could end its eight-year existence as a publicly traded company.

“I had no bad motive,” Musk said. “My intention was to do the right thing for all shareholders.”

Guhan Subramanian, a business and law professor at Harvard University hired as an expert for shareholder lawyers, derided Musk’s method of heralding a potential takeover as an “extreme outlier” fraught with potential conflict.

“The risk is that Mr. Musk timed his announcement of his (management buyout) proposal to serve his own interests rather than the interests of the company,” Subramanian said.


There’s another issue that threatens to undermine Musk’s defense. He had not blocked funding for his proposed deal or even determined the amount needed to make it happen, based on testimony from Musk, other witnesses and other evidence.

It’s one of the reasons U.S. District Judge Edward Chen decided last year that Musk’s 2018 tweets were fake and asked the jury to see them that way.

It also prompted regulators to allege Musk misled investors with the tweets, leading to a $40 million settlement with the U.S. Securities and Exchange Commission that also forced Musk to resign from his position. President of Tesla.

Chen ruled that the 2018 settlement, in which Musk did not admit wrongdoing and has since lamented the fabrication, cannot be mentioned to the jury.

Musk testified that he believed he had obtained an oral commitment to provide wherever money was needed for a Tesla buyout during a July 31, 2018 face-to-face meeting with Yasir al-Rumayyan, fund governor of Tesla. wealth of Saudi Arabia.

This was reinforced by testimony from former Tesla CFO Deepak Ahuja, who was at the talks and took al-Rumayyan on a half-hour tour of a Tesla factory.

But a text message al-Rumayyan sent to Musk after the “funding secured” tweets made it appear that talk of the Saudi fund funding a private takeover was preliminary.

“I would like to listen to your plan Elon and what are the financial calculations to take it,” al-Rumayyan wrote to Musk, according to a copy submitted as evidence at trial.

Musk presented al-Rumayyan’s text as an attempt to step back from his previous engagement. He also insisted that the Saudi fund had made an “unequivocal” commitment to finance the takeover.


After his 2018 tweets, Musk tried to secure the money to buy Tesla with the help of Egon Durban, co-CEO of private equity firm Silver Lake, which helped fund the takeover of Tesla. Dell in 2013. Musk also tapped Dan Dees, a senior executive at Goldman Sachs, an investment bank that had worked closely with Tesla.

In their testimony, Durban and Dees discussed efforts to raise money for a takeover of Tesla for a wide range of potential investors, including two Chinese companies, Alibaba and Tencent, as well as Google in documents originally named “Project Turbo”. “, then “Project Titanium.”

The takeover would have required between $20 billion and $70 billion, the documents say — funding that never came close to being raised, both Durban and Dees testified, largely because Musk abandoned the proposal to privatize. Tesla on August 24, 2018, after consultation with shareholders.

Tesla shares are now worth eight times what they were worth then, after adjusting for two stock splits.

Musk still maintains he could have gotten the money had he wanted to and, even if there was a shortfall, he could have covered any shortfall by selling some of his stock in privately held SpaceX. . It’s a strategy Musk used when he bought Twitter for $44 billion, except he sold about $23 billion of his shares in Tesla.

Both Durban and Dees testified that they had no doubt the money for a buyout could have been raised – picked up by former Tesla chief Antonio Gracias.

“He’s the Michael Jordan of fundraising,” Gracias said.

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