This Friday the fourth day of civil trial against billionaire Elon Musk began in San Francisco (California), in which Tesla investors accuse him of millions in losses as a result of a tweet he published in 2018. The now owner of Twitter, attended a declaration for fraud impelled against him. The tycoon denies that there is a “causal relationship” between his messages and the company’s stock market value.
Tesla’s chief executive testified in the last 30 minutes of the fourth session, mainly defending the social network’s usefulness in reaching out to investors and downplaying the impact of his messages on the car company’s share price.
Musk, who was called to testify today by his lawyers, recorded a similar case when in 2020, after tweeting “Tesla’s stock price is too high”, the price fell rapidly, but before the closing of the session it had recovered to exceed the opening price, according to CNN. “The obvious causal relationship is not there just because of a tweet,” he added.
He also gave him time to think that, between 2017 and 2019, Tesla faced pressure from short sellers – who bet on the fall of a company on the stock market – and labeled their practices as “evil” and facilitating “bad people on Wall Street steal money from small investors,” says Forbes.
In the trial, which will last about three weeks and which continues Monday with testimony from Musk, several investors are seeking compensation for a controversial 2018 tweet in which the defendant said he had raised funds to take the company public, something that never materialized.
“I am considering taking a Tesla off the stock market at $420. Secured financing,” said the message, in which Musk referred to the price per share that he could offer in the operation and that would have meant a valuation of the company at about 72,000 million Dollars.
The plaintiffs accuse Musk of lying about that alleged funding and claim that the message occasionally caused swings in Tesla’s price that cost them billions of dollars.
The businessman’s defense has argued that his intention was not to deceive anyone, but to offer maximum transparency, although he acknowledges that he communicated hastily and chose the wrong words.
However, Musk and Tesla – who is also accused – start at a disadvantage, since the judge in charge of the case, Edward Chen, already demonstrated last year that the tweet in question and others that they published later were “false and misleading”.
Already in 2018 Musk was accused by the Securities Exchange Commission and US counselor for three years of being chairman of the company’s board of directors, although he also continued to be its delegate.