Elon Musk was found not liable by a jury for costing investors millions of dollars when he tweeted that he had “secured” funding to take Tesla private.
The Friday verdict, issued by a nine-person Northern California jury, represents a legal victory for the 51-year-old billionaire, whose Tesla holdings have dropped 44% in value over the last year.
During the trial, Musk testified that he believed he had a handshake agreement in 2018 with Saudi Arabia’s Public Investment Fund to convert Tesla from a publicly traded company to a private one. He claimed that the Saudis later reneged on the agreement.
“I had no ill motive,” Musk testified last month for nearly eight hours. “My intention was to do what was right for all shareholders.”
According to Nicholas Porritt, an attorney representing Tesla shareholders in the case, no formal agreement was ever in place, and Musk’s tweet served his own interests rather than those of investors, costing them millions, if not billions, of dollars as Tesla’s share price fluctuated during the ordeal.
Even before the trial began, California District Court Judge Edward Chen ruled that the tweets were defamatory and reckless. Separately, Musk and Tesla reached a $40 million settlement with the Securities and Exchange Commission just one month after the tweets were published, but Chen instructed the jury not to take that into account in their deliberations.
After consulting with shareholders, Musk decided to scrap the take-private proposal just three weeks after his online musings. However, Musk and several colleagues testified that they had no doubt Musk could have raised the funds to take the company private if necessary, primarily by selling shares in his rocket company, SpaceX.
After adjusting for two stock splits that have occurred since Musk’s buyout tweet, Tesla’s shares are worth more than eight times what they were at the time of Musk’s buyout tweet.
