Elon Musk’s mysterious methods on show in Tesla tweet trial

By Associated Press: Elon Musk’s enigmatic persona and unconventional ways are rising as key reveals in a trial revolving round one in every of his most polarizing pursuits — tweeting.

The trial, centered on a pair of tweets saying Musk had obtained the cash to take Tesla non-public in 2018, reeled the 51-year-old billionaire right into a federal courtroom in San Francisco for 3 days of testimony that opened a peephole into his typically inscrutable thoughts.

Musk, who now owns the Twitter service that he deploys as his megaphone, was typically a examine in contrasts throughout his roughly eight hours on the stand. The CEO of the electrical carmaker is dealing with a class-action lawsuit filed on behalf of Tesla shareholders after Musk tweeted about an organization buyout that didn’t occur.

Through each his testimony and the proof submitted round it, Musk got here throughout as impetuous, brash, combative and contemptuous of anybody who questioned his motives as a game-changing entrepreneur who has impressed comparisons to Apple’s late co-founder, Steve Jobs.

READ: Elon Musk is welcome if he desires to make in India

At different occasions, Musk sounded just like the savvy visionary that his supporters hail him to be — an intrepid insurgent who by his personal estimates has raised greater than $100 billion from buyers. They have been richly rewarded from his management of pioneering firms that embody PayPal in digital funds, Tesla in electrical autos and SpaceX in rocket ships.

“It is relatively easy for me to get investment support because my track record is extremely good,” Musk wryly noticed.

But his confidence in his potential to get the cash he desires to pursue his plans is one purpose he discovered himself in court docket. The three-week trial is ready to renew Tuesday and head for jury deliberations by Friday.

Here’s what to know up to now:

PLANTING THE SEEDS

Evidence and testimony have proven Musk had began to mull taking Tesla non-public in 2017 so he wouldn’t should problem with the complications and distractions that accompany working a publicly traded firm.

READ: Elon Musk criticises Covid vaccines and says he felt like dying after his second booster shot

After a July 31, 2018, assembly with a high consultant from Saudi Arabia’s sovereign wealth fund, Musk despatched a letter to Tesla’s board outlining why he wished to take the automaker non-public at a worth of $420 per share — about 20% above its inventory worth on the time.

Musk was critical sufficient that he had already mentioned the professionals and cons with Michael Dell, who had gone by the public-to-private transition in 2013 when he led a $25 billion buyout of the non-public laptop firm bearing his title, in keeping with trial proof.

THE TROUBLESOME TWEETS

The crux of the case hinges on an Aug. 7, 2018, tweet wherein Musk declared “funding secured” to take Tesla non-public. Musk abruptly posted the tweet minutes earlier than boarding his non-public jet after being alerted that the Financial Times was about to publish a narrative that Saudi Arabia’s Public Investment Fund had spent about $2 billion shopping for a 5% stake in Tesla to diversify its pursuits past oil, in keeping with his testimony.

Amid widespread confusion about whether or not Musk’s Twitter account had been hacked or he was joking, Musk adopted up a number of hours later with one other tweet suggesting a deal was imminent.

READ: Elon Musk has GodMode on Twitter and may tweet from any account, says whistleblower

Musk defended the preliminary tweet as a well-intentioned transfer to make sure all Tesla buyers knew the automaker is likely to be on its technique to ending its then-eight-year run as a publicly held firm.

“I had no ill motive,” Musk testified. “My intent was to do the right thing for all shareholders.”

Guhan Subramanian, a Harvard University enterprise and regulation professor employed as an knowledgeable for shareholder legal professionals, derided Musk’s technique for saying a possible buyout as an “extreme outlier” fraught with potential conflicts.

“The risk is that Mr. Musk timed his announcement of his (management buyout) proposal to serve his own interests rather then the interests of the company,” Subramanian testified.

WHERE’S THE MONEY?

There’s one other subject threatening to undermine Musk’s protection. He hadn’t locked up the financing for his proposed deal and even pinned down down how a lot could be wanted to drag it off, based mostly on testimony from Musk, different witnesses and different proof.

READ: Elon Musk is formally Mr Tweet on Twitter, know the story behind his new title

That is one purpose U.S. District Judge Edward Chen had determined final 12 months that Musk’s 2018 tweets have been false and has instructed the jury to view them that means.

It additionally prompted regulators to allege Musk misled buyers with the tweets, leading to a $40 million settlement with the U.S. Securities and Exchange Commission that additionally required Musk to step down as Tesla’s chairman.

Chen dominated that the 2018 settlement, wherein Musk didn’t acknowledge wrongdoing and has since lamented making, can’t be talked about to the jury.

Musk testified that he believed he had secured an oral dedication to supply wherever cash was wanted for a Tesla buyout throughout a July 31, 2018, face-to-face assembly with Yasir al-Rumayyan, governor of Saudi Arabia’s wealth fund.

That was bolstered in testimony from Tesla’s former chief monetary officer, Deepak Ahuja, who was on the discussions and took al-Rumayyan on a half-hour tour of a Tesla manufacturing unit.

But a textual content message al-Rumayyan despatched to Musk after the “funding secured” tweets made it seem that the discussions in regards to the Saudi fund financing a non-public buyout have been preliminary.

“I would like to listen to your plan Elon and what are the financial calculations to take it,” al-Rumayyan wrote to Musk, in keeping with a replica submitted as proof within the trial.

Musk framed al-Rumayyan’s textual content as an try to backpedal from his earlier dedication. He additionally insisted the Saudi fund had given an “unequivocal commitment” to financing the buyout.

MONEY MANEUVERING

After his 2018 tweets, Musk tried to get the cash wanted for the Tesla buyout with the assistance of Egon Durban, co-CEO of the non-public fairness agency Silver Lake, which helped finance the Dell buyout in 2013. Musk additionally enlisted Dan Dees, a high govt with Goldman Sachs, an funding banking agency that had labored carefully with Tesla.

In testimony, each Durban and Dees mentioned efforts to lift cash for a Tesla buyout for a variety of potential buyers that included two Chinese firms, Alibaba and Tencent, in addition to Google in paperwork initially code-named “Project Turbo,” then “Project Titanium.”

READ: Elon Musk doesn’t learn about Twitter banning tweets linking to BBC documentary in India

The buyout would have required wherever from $20 billion to $70 billion, in keeping with the paperwork — funding that by no means got here near getting raised, Durban and Dees each testified, largely as a result of Musk scrapped the proposal to take Tesla non-public on Aug. 24, 2018, after consulting with shareholders.

Tesla’s shares at the moment are price eight occasions what they have been then, after adjusting for 2 inventory splits.

Musk nonetheless contends he might have gotten the cash had he wished and, even when there was a shortfall, he might have lined any hole by promoting a few of his inventory in privately held SpaceX. That is a method Musk utilized in his $44 billion buy of Twitter, besides he offered about $23 billion of his inventory in Tesla.

Durban and Dees each testified that that they had little question the cash for a buyout might have been raised — echoed by former Tesla director Antonio Gracias.

“He is the Michael Jordan of fundraising,” Gracias testified.

Published On:

Jan 30, 2023