Elon Musk, the CEO of Tesla Inc. (TSLA.O), gave testimony on Friday in defense of himself in a fraud trial over his 2018 tweet claiming to have money to take the electric automaker private. He said that investors do not always respond to his Twitter postings as he expected.
Questions about Musk’s use of Twitter, the social media site he purchased in October, came up at the start of his hearing. Although he referred to it as the most democratic form of communication, he claimed that his tweets did not always have the desired effect on Tesla stock.
Musk told the jurors in federal court in San Francisco, “Just because I tweet something does not imply others believe it or will act accordingly.”
During his brief testimony, which ended with the court adjourning until Monday, Musk was not questioned about his tweet from 2018 in which he said he was thinking about taking Tesla private and that he had “financing secured.”
He is anticipated to discuss his claims that he had Saudi investor backing to take Tesla private, which never happened, as well as whether he knew his tweet contained substantial misinformation.
The plaintiffs have already overcome significant legal challenges in this unusual securities class action trial after U.S. Judge Edward Chen ruled that Musk’s financing post was careless and dishonest last year.
Musk allegedly lied when he posted the tweet, costing investors millions, according to shareholders.
In contrast to his occasionally confrontational testimony in previous cases, Musk talked softly and occasionally bemusedly while donning a black suit.
Musk talked about the challenges the company faced around the time he tweeted, “financing secured,” including bets made by short-sellers that the stock would decline.
When explaining short-sellers, who make money when a stock’s price drops, he stated, “A lot of sharks on Wall Street wanted Tesla to perish, very badly.”
He claimed that short sellers spread incorrect information and argued that this behavior ought to be outlawed.
Tesla’s stock concluded the day at $133.42, up approximately 5%.
Investors claim that Musk lied when he sent the tweet, costing them millions of dollars.
In contrast to his occasionally confrontational testimony in previous cases, Musk, who was dressed in a dark suit over a white button-down shirt, talked gently and occasionally with bemusement.
When asked about the challenges the company faced at the moment he tweeted, “financing secured,” Musk mentioned short-sellers predictions that the stock would decline as one of the issues.
He referred to short-sellers, who make money when a stock’s price drops, as “a bunch of sharks on Wall Street” and claimed that they “wanted Tesla to die, very badly.”
He claimed that short sellers fabricate stories and advocated making the practice against the law.
Shares of Tesla closed at $133.42, up approximately 5%.
Professor Guhan Subramanian of Harvard Law School testified before the jury that Musk’s conduct in 2018 was “unusual” and “incoherent” in terms of negotiating a business arrangement because he made his intentions public without conducting adequate legal or financial research.
Whether the tweet artificially raised Tesla’s share price by exaggerating the status of funding for the purchase, and if so, by how much, will be decided by a jury of six men and three women.
The defendants include current and former Tesla directors who, according to Spiro, responded to Musk’s initiative with “pure” intentions.