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Trial begins against Elon Musk for his tweets about Tesla


The tycoon has failed in his attempt to take the San Francisco process, where he considers that the jury may be hostile to him

“Secured financing”.

Those two words have been driving Elon Musk's head for more than four years.

He wrote them in a tweet in which he assured that he was considering delisting Tesla, the manufacturer of electric cars.

Musk even posted the price of the deal he was planning, $420 (the number for marijuana), and Tesla's stock soared.

But there was no financing or offer.

Musk agreed to a fine with the supervisor and now faces lawsuits demanding multimillion-dollar compensation.

Am considering taking Tesla private at $420.

Funding secured.

— Elon Musk (@elonmusk) August 7, 2018

The trial begins this Tuesday in San Francisco with jury selection.

The owner of Twitter has tried unsuccessfully to move the process from there to Texas, where Tesla is now headquartered.

Musk argued that a San Francisco jury may be biased against him, especially given the layoffs that have affected half of Twitter's staff and his chaotic takeover of the social network.

After his first tweet on August 7, 2019, Musk insisted with others that suggested an imminent operation.

“Shareholders can sell at 420 or keep the shares [in the delisted company],” he first added.

And he returned to the charge: “The support of investors is confirmed.

The only reason it is not certain is that it depends on the shareholder vote,” he later said in another tweet.

He even sent a message to the employees explaining his plans.

The operation was never submitted to a shareholder vote.

The shares fell when the offer was seen not to materialize and the Securities and Exchange Commission (the SEC) opened an investigation into the apparent price manipulation.

Musk reached an agreement to leave the presidency of Tesla (although he remains the CEO), accept a fine of 40 million dollars (to be paid in half between himself and the company) and subject future tweets about the manufacturer to supervision. electric cars.

In another parallel case, Musk is now appealing this part of the agreement, alleging that it violates his freedom of expression.

Tesla has doubled its shares since 2018. That $420 would equal $28 for each of the current shares.

The company has risen much more on the stock market.

It topped $400 in 2021 and even after the 2022 crash, it still trades around $130.

Thus, those who remained shareholders have not only not lost money, but have multiplied it.

Those who allege damages are investors who bought in the heat of the possible offer and sold at a loss when that outlook deflated.

During the investigation of the case, Musk and his lawyers have provided an exchange of messages with the person in charge of the sovereign wealth fund of Saudi Arabia, which the tycoon alleges is the one who was going to provide the financing to launch the offer with which to exclude Tesla from Bag.

However, what these messages show is that Yasir Al-Rumayyan, the person in charge of the fund, had not reached any compromise.

"We can't approve something we don't have enough information about," he replied to Musk in one of his messages.

The financing, therefore, was not “insured”.

Following jury selection, the actual trial is scheduled to begin in February.

On the witness list are Oracle founder Larry Ellison and James Murdoch, son of media mogul Rupert Murdoch.

But it will surely be Musk's own statement that attracts the most attention.

The tycoon has another case open before a Delaware court for the multimillion-dollar compensation in shares he received as head of Tesla and that a shareholder challenged as abusive, unjust enrichment.

The trial for these more than 55,000 million in compensation was held last November and a ruling is pending.

Tesla presents its annual results next week and will have an investor day in early March.

The company lost two thirds of its value on the stock market in 2022. It has disappointed with its sales due to the inability to sell all the cars it manufactured.

The company has applied heavy discounts to try to get rid of its stocks.

But beyond failing to meet its short-term goals, the question is whether its dominant position in the electric vehicle market is sustainable in the long term.

Source: elparis

All business articles on 2023-01-17

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