Elon Musk Victorious In Lawsuit Over 2018 'Funding Secured' Tweets: 'Wisdom Of The People Has Prevailed!'

Zinger Key Points
  • Following the verdict, Tesla shares rose 1.4% in after-hours trading. 
  • Investors sought billions of dollars in damages for their losses after Musk posted about taking Tesla private.

On Friday, a jury ruled that Tesla Inc TSLA CEO Elon Musk is not liable for the losses incurred by Tesla shareholders following his "funding secured" tweet from 2018. 

The verdict, issued by a nine-person Northern California jury, came after two hours of deliberation following a three-week trial, reports Reuters.  

Following the verdict, Tesla shares rose 1.4% in after-hours trading on Friday. 

Investors sought billions of dollars in damages for their losses after Musk posted about taking Tesla private at $420 per share on Twitter.

During the hearing, Musk's lawyer Alex Spiro said that his "funding secured" tweet was "technically inaccurate" but that investors only cared that Musk was considering a buyout.

"The whole case is built on bad word choice. Who cares about bad word choice? Just because it's a bad tweet doesn't make it fraud," Spiro said during closing arguments.

Though Musk was not present during the verdict announcement, he went on Twitter and said he was "deeply appreciative" of the jury's decision.

However, Nicholas L. Porritt of Levi & Korsinsky, a shareholder attorney, shared his displeasure with the outcome and said, "We are disappointed with the verdict and are considering the next steps."

"The outcome is astounding. The U.S. anti-securities fraud law has always been thought to be this great bulwark against misstatements and falsehoods," Reuters quoted Minor Myers saying, who teaches corporate law at the University of Connecticut.

During the three-week trial, Musk testified that he met with representatives of Saudi Arabia's sovereign wealth fund, the Public Investment Fund, at Tesla's Fremont, California, factory on July 31, 2018. 

According to Musk, the fund governor, Yasir Al-Rumayyan, retracted the commitment to take Tesla private. 

"I was very upset because he had been unequivocal in his support for taking Tesla private when we met, and now he appeared to be backpedaling," Musk testified.

He said his tweets generally did not always affect Tesla stock the way he expects.

"Just because I tweet something does not mean people believe it or will act accordingly," Musk told the jury.

During the trial, Musk testified that he believed he could have sold his stake in his rocket company SpaceX to take Tesla private in 2018. 

"SpaceX stock alone meant 'funding secured' by itself. So it's not that I want to sell SpaceX stock, but I could have, and if you look at the Twitter transaction — that is what I did. I sold Tesla stock to complete the Twitter transaction. And I would have done the same here," Musk said in court. 

Read Next: While Elon Musk Is Focusing More On Twitter And Tesla, SpaceX Employees Are Loving The Calm

Photo: Courtesy of Dunk on flickr

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