Elon Musk is doubling down on the tweet about taking Tesla private that got him in trouble with the SEC
Lawyers for the billionaire chief executive officer of the electric-car maker said in a court filing Tuesday that Saudi Arabia’s sovereign wealth fund had indeed agreed to support his attempt to take the company private.
“Elon Musk’s August 7, 2018 tweet informing the public that he was considering taking Tesla private was entirely truthful,” according to the heavily redacted filing by attorney Alex Spiro. “Mr. Musk was considering taking Tesla private at $420 a share. Funding was secured. There was investor support.”
The tweet roiled the company’s shares and led the U.S. Securities and Exchange Commission to sue Musk for fraud. Musk and Tesla settled with the agency, agreeing to pay $40 million in fines. Musk stepped down as chairman of the company for three years.
Shareholders claim in a class-action suit pending in federal court in San Francisco that Musk’s tweets spurred wild swings in the company’s share price and caused billions of dollars in losses.
The investors are seeking a judge’s ruling — ahead of a trial set for May 31 — that the tweets were false statements. A hearing is scheduled in March.
“Not only did Mr. Musk firmly believe funding was secured when he tweeted, in reality (per Mr. Musk’s discussions with the PIF) it was secured,” according to Spiro’s filing, which refers to the acronym for Saudi Arabia’s Public Investment Fund.
Tesla Lacks Edge in Billion-Dollar Funding Secured Tweet Suit
Tesla’s stock surged as much as 13% after the take-private tweet, hammering short sellers who hadn’t covered their positions. Other investors who read Musk’s message as a buy sign sustained losses when doubts mounted about his ability to follow through and the company’s share price plummeted.
Musk announced he was keeping Tesla public via a Friday night blog post a few weeks later.
The case is In re Tesla Inc. Securities Litigation, 18-cv-04865, U.S. District Court, Northern District of California (San Francisco).
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