Tesla Inc (NASDAQ:TSLA)’s planned privatisation in 2018 was “serious” but Elon Musk used the “wrong words,” according to lawyers representing him in a San Francisco trial.
Musk is facing a lawsuit from Tesla investors who claim to have lost out of millions after he tweeted in 2018 that he had the US$72bn funding needed to take Tesla private.
He also claimed he had “investor support” for the deal.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
Musk’s claims were not followed up though, with a deal to make the electric vehicle giant a private company never taking place.
Investors are suing Musk for the damages they claim they suffered after being misled by his tweets, which they argue equate to fraud.
Alex Spiro, Musk’s lawyer, said: "You will come to learn very soon that this was not fraud, not even close," while Musk’s tweet did contain “technical inaccuracies,” he “used the wrong words”.
On the other side, lawyer Nicholas Porritt accused Musk of lying, arguing: "Millions of dollars were lost when [his] lies were exposed," as shareholders rushed to offload positions in the firm.
Tesla shares fell and then soared some 11% after his tweet, prompting to US Securities and Exchange Commission to fine Tesla and Musk US$40mln collectively and force him to step down as the company’s chairman.
Musk could be made to take the stand when the trial resumes on Friday, while Tesla’s share price resumed a poor run of form on the first day of the hearing, falling 2% to US$128.8.