Elon Musk Defends 2018 Tweets in Securities Fraud Trial

by Derick SullivanJanuary 21, 2023

In a recent court appearance in San Francisco, Tesla CEO Elon Musk defended tweets he posted in August 2018.

Anadolu Agency | Getty Images

In those tweets, Musk stated that he had "funding secured" to take Tesla private for $420 a share. He also said that "investor support" was "confirmed." As a result, Tesla's stock temporarily stopped trading. The stock remained unstable for weeks afterward. Musk later indicated at the time that he was in talks with Saudi Arabia's sovereign wealth fund, but a deal never materialized.

As a result of the tweets, the Securities Exchange Commission (SEC) charged Musk and Tesla with civil securities fraud. Musk and Tesla individually paid the agency $20 million in fines. Additionally, they also struck a revised settlement agreement requiring Musk to temporarily step down as Tesla's chairman of the board. The mogul's Twitter activity also sparked a shareholder class action suit from Tesla investors, alleging that Musk's tweets were misleading and cost them a great deal of money.

Under oath, Musk said on Friday that it's hard to tie Tesla's stock price to his tweets. He stated that "there have been many cases where I thought that if I were to tweet something, the stock price would go down," but it went higher. Musk also revealed that he thinks poorly of short sellers, believing "short selling should be made illegal."

Musk said short sellers were "bad people on Wall Street" who "steal" from other investors. According to CNBC, when Musk tweeted about taking Tesla private in 2018, Tesla was one of the most heavily shorted stocks. The company's share price surged nearly 10% that day.

Musk will continue testifying on Monday.

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