Dark suit, white shirt and tie, he defended for half an hour his way of communicating on Twitter and his achievements at the head of the automotive group. His testimony is due to continue on Monday.
The boss of Tesla – and of Twitter, since the end of October – had created a stupor on August 7, 2018 by saying that he wanted to withdraw his group from the Stock Exchange at a price of 420 dollars per share, then that the financing was “secure”.
“Elon Musk, (then) CEO of Tesla, lied, and his lies cost people millions of dollars”launched Wednesday Nicholas Porritt, lawyer of the plaintiffs gathered in a class action.
On August 10, 2018, they filed a complaint against the business manager for having “artificially manipulated the price of Tesla’s stock in order to completely ruin investors” who bet on the fall of the course.
These downward speculations “should be illegal”, asserted Elon Musk, questioned by Mr. Porritt on Friday about his opinion concerning this type of investor.
“These are bad people who steal money from small investors. They want Tesla to die (…) and they are ready to do anything to kill companies, it’s evil”he continued for the jury.
His lawyer Alexander Spiro assured Wednesday that Elon Musk had every intention of taking Tesla out of the stock market and had no doubts about its financing capabilities, thanks to assurances from the Saudi sovereign wealth fund.
The tweet was written “hastily”the choice of words was “careless”but “it’s not a fraud”he had hammered.
On Friday, the plaintiffs’ lawyer sought to show that Elon Musk and his entourage were well aware of the consequences of his unbridled volubility on Twitter.
He referred to one of his tweets from July 2018, when he discussed “pedo guy” a British speleologist who had criticized him.
“Have you taken a break from Twitter?”Mr. Porritt asked, referring to advice to that effect from a senior Tesla official and an investor.
“I do not think so”replied the billionaire.
Tweeter “is the most democratic way to communicate. It gives the same access to information to all investors, big or small”he detailed.
He also said market reactions to his tweets were often unpredictable, and took an opportunity to recall how difficult 2018 was for Tesla.
“I didn’t sleep at the factory by choice, but by obligation”he insisted, before adding that being listed on the stock exchange represented an additional constraint, since the company was exposed to attacks from investors.
Tesla shares jumped to $386.48 just after the offending tweets. By August 16, it was down to $335.45, according to the figures given to the jury on Tuesday by Judge Edward Chen, far from the $420 per share mentioned by Musk.
The trial is expected to last three weeks. In a previous decision related to this case, a judge ruled that the infamous 2018 tweet could be considered “false and misleading”.
One of the plaintiffs, Timothy Fries, said on Friday that he had invested in Tesla the day after the messages posted on Twitter.
For him, the message on the “secure financing” meant that Elon Musk “had a partner who was committed and whose funds were approved”.
But the stock price fell in the following days. “I lost $5,000. I hope to recover my losses”said Mr. Fries.
The billionaire’s proposal was “incomplete, inconsistent and illusory in some respects”said Guhan Subramanian, a Harvard professor and specialist in corporate buyouts.
The manufacturer had quickly abandoned the idea of leaving the rating.
But the American stock market policeman, the SEC, believing that the boss had not provided proof of his financing, had forced him to cede the presidency of the board of directors, to pay a fine of 20 million dollars and demanded by the following that his tweets directly related to the activity of Tesla are pre-approved by a competent lawyer
“Elon Musk sees this lawsuit as a way to have this SEC decision reconsidered”commented Josh White, former economist of the federal agency.
“He thinks he did nothing wrong and he has the right to say whatever he wants on Twitter.”