Elon Musk says Saudi fund wanted to privatize Tesla

Elon Musk testified in federal court on Monday that Saudi Arabia’s sovereign wealth fund “unequivocally wanted to take Tesla private,” in a lawsuit over whether Mr. Musk’s 2018 statements about pulling out of the automaker of the stock market had caused investors to lose billions. of dollars.

The judge in charge of the case, in San Francisco, had already ruled that some of Mr. Musk’s statements regarding the privatization of the company were false, including his claim that he had obtained financing for the transaction.

Testimony about the Saudi fund, the Public Investment Fund, came in response to questions from a plaintiff’s lawyer who pressed Mr. Musk, Tesla’s chief executive, for more details about the project privatization of the company. Mr Musk said Saudi fund officials had not signed any documents committing to a deal and had not discussed how much they would invest in the deal.

“The exact amount wouldn’t be known without knowing who else would be participating,” he said. But he added that he thought ‘if they say they’re going to do something, they do it’.

Taking a public company off the stock exchange can be costly and difficult. Individuals or investment firms seeking to take a company private must find the money to buy all or most of its shares.

The Saudi fund, which had acquired a 5% stake in Tesla before Mr Musk announced his plans, would have been an important part of any deal. Mr. Musk had long claimed that Saudi investors were committed to the deal, and communications in court documents showed that Mr. Musk had criticized Saudi officials after reports suggested they were lukewarm about the deal. a deal.

Mr. Musk and Tesla’s legal team tried unsuccessfully to compel the fund’s employees to testify at the trial. This month, lawyers for the fund called the subpoenas “legally flawed” and “frankly, frivolous”. A spokesperson for the fund did not immediately respond to a request for comment on Monday.

On August 7, 2018, Mr. Musk wrote on Twitter: “I’m considering privatizing Tesla at $420. Financing assured. Mr. Musk then wrote“Investor support is confirmed. The only reason it’s not certain is that it depends on a shareholder vote. Tesla’s stock price surged after Mr. Musk posted those messages, but fell when the proposal fell through.

When asked if he had priced Tesla at $420 per share because it would be “a joke your girlfriend would enjoy”, Mr. Musk said: “There’s a bit of karma around that. $420, though I have to wonder if that’s good or bad karma at this point.” Mr Musk then added that he chose $420 because it was about 20% higher than Tesla’s stock price at the time.

Mr. Musk, dressed in a dark suit and black surgical mask, entered the courtroom and walked straight to the witness box. He watched the jurors enter and nodded at them.

Investor lawyers argued that people made decisions about their investments in Tesla because Mr. Musk said he had secured the financing to take Tesla private. But lawyers for Mr. Musk and Tesla have said investors may have made decisions based on Mr. Musk’s statement that he was considering taking Tesla private – a statement his lawyers say is true. .

Legal experts say most businesses and business leaders would likely have settled a case like this. But Mr. Musk has often shown his willingness to let the lawsuits against him and Tesla go to court.

While on the witness stand on Friday, Mr. Musk acknowledged that his Twitter account provided important information about Tesla and that he had to follow Securities and Exchange Commission rules. But he denied that his social media posts were responsible for the swings in Tesla’s stock price. He also said he couldn’t be as thorough on Twitter as Tesla could be in SEC filings and press releases.

Mr. Musk also said his friends, as well as Tesla executives and investors, suggested he take a break from Twitter before posting about Tesla going private.

In 2018, Mr. Musk and Tesla settled a separate lawsuit with the SEC over his proposal to take Tesla private. They paid fines to the SEC, and Mr. Musk agreed to resign as Tesla chairman and allow a lawyer to review certain statements about the company before posting them on social media.

The lawsuit began three months after Mr. Musk acquired Twitter. It has since laid off most of its employees, changed its content policies, and allowed previously banned or suspended users to return to the platform.