Elon Musk cleared of manipulating Tesla’s stock value via Twitter
The tycoon was accused by a group of investors, who considered that he intended to manipulate the stock market value of the car company through false messages on social networks.
A federal court in San Francisco has acquitted this Friday the CEO of Tesla, Elon Muskof a class action lawsuit stock fraud presented by a group of investors of the mentioned company. Following a three-week trial, the billionaire tycoon has been found not guilty of trying to manipulate the valuation of the car corporation’s shares through his messages posted on Twitter in 2018, two years before becoming the CEO of the social network.
In these messages, Musk claimed to have the necessary funds to take the company public, something that has never happened. “I am considering delisting Tesla at 420 dollars (380 euros). Financing secured,” Musk posted on Twitter. That payment of $420 a share represented an increase of 23% over Tesla’s price the day before. “Investor support is confirmed. The only reason it’s not certain is that it depends on shareholder vote,” he added later.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
The share price soared after the tweets and then fell again after August 17, 2018, when it became clear that the buyout would not take place. That is why the plaintiffs demanded billions of dollars in compensation for the damage that said statements caused in the value of their stock property. An economist hired by the plaintiffs calculated the investors’ losses in 12,000 million of dollars.
“Just because I tweet something doesn’t mean people believe it or act on it,” Musk said during the trial. The businessman also alleged during the trial that he had the objective of obtaining financing for a supposed IPO of Tesla thanks to the Public Investment Fund of Saudi Arabia and that, therefore, his messages on Twitter were intended to inform investors of his intentions.
As Bloomberg has collected, Tesla shareholders filed a lawsuit against Musk, Tesla and the company’s board of directors for the messages arguing that said financing was not secured and also alluding to the commercial losses caused due to fluctuations in the shares of Tesla. Tesla behind the tweets. Musk’s lawyer, Alex Spiro, has claimed that Musk’s Twitter messages were “technically inaccurate“. “That it is a bad tweet does not make it a fraud,” he added, as ABC News has collected.
For his part, the investors’ lawyer Nicholas Porrit argued that Musk could not have had a firm agreement, since he would only have had a meeting of 45 minutes with the leader of the Saudi fund, Yasir al Rumayyan, at a Tesla factory on July 31, 2018 and no written documentation existed, as ABC News has claimed.
Source of data and images: elperiodico