Elon Musk was depicted Wednesday as either a liar who callously jeopardized the savings of 'regular people' or a well-intentioned visionary as attorneys delivered opening statements at a trial focused on a Tesla buyout that never happened.
Documents related to the class-action lawsuit on behalf of investors who owned Tesla stock in August 2018 are wheeled toward a federal courthouse in San Francisco, Wednesday, Jan. 18, 2023. Elon Musk was depicted Wednesday as either a liar who callously jeopardized the savings of "regular people" or a well-intentioned visionary as attorneys delivered opening statements at a trial focused on a Tesla buyout that never happened.
The prospect of what would have been a US$72 billion buyout fuelled a rally in the company's stock price that abruptly ended a week later after it became apparent that he did not have the funding to pull off the deal after all. Tesla shareholders then sued him, saying that Tesla shares would not have swung so widely in value if he had not dangled the prospect of buying the company for US$420 per share.
Musk's lawyer, Alex Spiro, countered that the run-up in Tesla's stock after the tweet mostly reflected investors' belief in Musk's ability to pull off stunning feats, including building the world's largest electric automaker while also running SpaceX, a maker of rocket ships. "He didn't plan to tweet this," Spiro said of Musk's Aug. 7, 2018, statement at the heart of the trial. "It was a split-second decision" aimed at being as transparent as possible about the discussions with the Saudi fund about a potential deal.
But Chen has already ruled that Musk's tweet was false, a finding that can be alluded to during the trial without specifically mentioning the determination made by the judge. Pollitt seized on that opportunity during his opening statement, informing jurors that they are to assume Musk's tweet was false, as the judge allowed, prompting Spiro to shake his head while sitting at his table.
Those concerns contributed to a 65% percent decline in Tesla's stock last year that wiped out more than US$700 billion in shareholder wealth -- far more than the US$14 billion swing in fortune that occurred between the company's high and low stock prices from Aug. 7 to Aug. 17, 2018, the period covered in the lawsuit.
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