SAN FRANCISCO – Tesla Inc. CEO Elon Musk testified Tuesday that he intended to inform and not deceive shareholders when he tweeted in 2018 that he had funding lined up to take the electric car maker private, which shareholders allege was a lie.
Musk is defending against claims he defrauded investors by tweeting on Aug. 7, 2018, that he had "funding secured" to take Tesla private at $420 per share, and that "investor support is confirmed."
He testified Tuesday in response to questions from his lawyer Alex Spiro that he intended to share information about his interest in taking Tesla private with all investors after it had already been given to an exclusive few.
Musk said he had already discussed his interest with the Tesla board and Saudi Arabia's sovereign wealth fund, the Public Investment Fund, and he feared it would leak to the media. He said he had learned that the Financial Times planned to publish a story detailing the Saudi Public Investment Fund acquiring a 3 percent-5 percent stake in Tesla.
"I had no ill motive," he said. "My intent here was to do the right thing for shareholders."
Musk reiterated his role was as the primary bidder for going private, and Tesla’s board would represent the company and shareholders. He has testified that he chose not to take Tesla private due to a lack of support from some investors and a wish to avoid a lengthy process.
Musk returned to the stand on Tuesday after about five hours on Monday and an appearance on Friday.
The trial tests whether Musk can be held liable for his sometimes rash use of Twitter.
Tesla's stock surged after Musk's 2018 tweet about the $420 per share price, which was a premium of about 23 percent to the prior day's close, only to fall as it became clear the buyout would not happen. Investors say they lost millions of dollars as a result.
A jury of nine will decide whether Musk artificially inflated the company's share price by touting the buyout's prospects, and if so, how much.
Musk has testified that it was his "opinion" that funding was secured. His lawyer, Alex Spiro, pointed to written exchanges between Musk and big names in corporate finance who supported his plans to go private, including Dan Dees, co-head of global banking and markets at Goldman Sachs, and Oracle Corp. CEO Larry Ellison, a fellow billionaire. Dees emailed Musk in an Aug. 7 email about the Tesla CEO’s blog post explaining the deal: “I thought your letter today was excellent. Very clear.”
On Monday, Musk said he could have financed the deal by selling his stake in SpaceX, the aerospace company where he is also chief executive officer. He said his 60 percent holding in privately held SpaceX was worth about $15 billion to $20 billion in 2018, and could have used that to help take Tesla private. “It’s not something I’d ideally like to do but it’s something I could do.”
In addition, Musk testified Monday that he met on July 31, 2018, with representatives of the Public Investment Fund at Tesla's factory in Fremont, California.
He acknowledged that a specific takeover price was not discussed, but said the Saudi representatives made clear they would do what it took to make a buyout happen.
Musk said the fund's governor, Yasir Al-Rumayyan, later backpedaled on the commitment to take Tesla private.
Lawyers for Al-Rumayyan did not return a request for comment.