Science

Elon Musk defends himself against fraud allegations

Elon Musk at the Tesla Model X launch in Fremont, California on September 29, 2015. (SUSANA BATES/AFP/Archives) #

Elon Musk spoke Friday in San Francisco at a lawsuit where investors accuse him of fraud for tweeting more than four years ago that he intends to take Tesla off the stock market.

In a dark suit, white shirt and tie, he defended his way of communicating on Twitter for half an hour and his accomplishments at the head of an automotive group. His testimony is due to continue on Monday.

The boss of Tesla — and, since late October, Twitter — raised eyebrows on August 7, 2018, when he said he wanted to take his group off the stock exchange at $420 a share when the funding was “secured.”

“Elon Musk, the (then) CEO of Tesla, lied and people lost millions of dollars because of his lies,” Nicholas Porritt, a lawyer for class-action plaintiffs, said Wednesday.

On August 10, 2018, they filed a complaint against a business executive for “artificially manipulating Tesla’s share price in order to completely bankrupt investors” who were betting on the price drop.

This bearish speculation “should be illegal,” Elon Musk said when asked by Mr. Porritt on Friday about his views on this type of investor.

“These are bad people who steal money from small investors. They want Tesla to die (…) and they are ready to do anything to kill the companies, this is evil,” he continued in the intention of the jury.

“Careless”

His lawyer, Alexander Spiro, assured on Wednesday that Elon Musk had every intention of taking Tesla off the stock market and had no doubts about its financial capabilities thanks to assurances from Saudi Arabia’s sovereign wealth fund.

The tweet was written “in haste,” the choice of words was “reckless,” but “this is not a scam,” he chimed in.

On Friday, a lawyer for the plaintiffs was keen to show that Elon Musk and his entourage are well aware of the consequences of his rampant Twitter chatter.

He referred to one of his July 2018 tweets when he called a British caver who criticized him a “pedophile”.

“Did you take a break from Twitter?” Porritt asked, referring to advice on the matter from a senior Tesla executive and an investor.

“I don’t think so,” the billionaire replied.

Twitter is “the most democratic way to communicate. It gives the same access to information to all investors, large or small,” he explained.

He also said that market reactions to his tweets were often unpredictable and took the opportunity to remember how difficult 2018 was for Tesla.

“I slept in the plant not by choice, but by duty,” he insisted, before adding that the listing on the stock exchange represented an additional constraint as the company was under attack from investors.

Tesla shares jumped to $386.48 just after the offensive tweets. It fell to $335.45 on Aug. 16, according to figures provided to jurors on Tuesday by Judge Edward Chen, a far cry from the $420 per share mentioned by Musk.

“Illusory”

The trial is expected to last three weeks. In a previous ruling in the case, the judge ruled that the famous 2018 tweet could be considered “false and misleading.”

One of the plaintiffs, Timothy Fries, said on Friday that he invested in Tesla the day after he posted on Twitter.

For him, the “funding secured” message meant that Elon Musk “had a partner who was committed and whose funds were approved.”

But in the days that followed, the share price fell. “I lost $5,000. I hope to make up for my losses,” Fries said.

The billionaire’s proposal was “incomplete, incoherent, and in some respects illusory,” said Guhan Subramanian, a Harvard professor and specialist in corporate takeovers.

The manufacturer quickly abandoned the idea of ​​leaving the rating.

But the American stock market cop, the SEC, believing the boss failed to provide proof of his funding, forced him to step down as chairman of the board, pay a $20 million fine, and required his tweets directly related to Tesla to be pre-approved by a competent authority. lawyer

“Elon Musk sees this lawsuit as a way to revisit this SEC decision,” commented Josh White, a former federal agency economist.

“He thinks he did nothing wrong and he has the right to say whatever he wants on Twitter.”

Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker.