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Elon Musk testifies in Tesla ’Funding secured’ securities fraud trial



SAN FRANCISCO — Elon Musk took the stand Monday for his first full day of testimony in the federal shareholder trial over his 2018 declaration he had “Funding secured” to take Tesla private, arguing his stake in his private rocket company SpaceX justified his statement at the time.

“I really have two big assets, which is Tesla and SpaceX. I believe with the SpaceX stock alone, I felt like funding was secured,” he said. “It’s very important for the jury to know my SpaceX shares alone would have meant that funding was secured. Very important.”

The Tesla CEO previously said that not all believe his tweets, and Twitter’s character limit does not allow for comprehensive statements, even if they are truthful, in around a half-hour on the witness stand Friday. Appearing shortly after 8:30 a.m. wearing a suit and black tie, Musk took the witness stand and answered further questions from a plaintiff’s attorney.

Musk, who appeared visibly uncomfortable at times, complained of back pain and at one point apologized to the attorney questioning him.

“I had trouble sleeping last night so unfortunately I am not at my best,” he said.

Musk is testifying in U.S. District Court as a defendant in a class action securities fraud lawsuit brought by investors who allege they suffered billions in losses from Musk’s 2018 claim, which U.S. District Judge Edward M. Chen has already ruled untrue.

On Aug. 7, 2018, Musk tweeted: “Am considering taking Tesla private at $420. Funding secured.” Court documents also reference a second tweet, sent later that day; reading, “Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote.”

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Musk’s claim quickly fell apart as it soon became clear that while Musk had been in communication with the Saudi Arabian sovereign wealth fund concerning a potential take-private transaction at a price of around $70 billion, any deal and funding necessary to complete it were not a certainty. By Aug. 24 of that year, Musk said he planned to keep Tesla public.

The Securities and Exchange Commission sued Musk the following month and he and Tesla each agreed to pay $20 million fines to settle the matter, while Musk stepped aside as chairman of the Tesla board.

Musk and Tesla are each defendants in the federal shareholder lawsuit. Jurors are to decide on the liability of Musk and Tesla board members current and former who were controlling officers of the company at the time — as well as potential damages and how they should be apportioned.

Musk took aim at short sellers in his testimony on Friday, characterizing them as individuals who want to see the company fail, and said he uses his Twitter feed to disseminate company information and also “memes” because he sees it as an effective means of communicate with the public.

Musk, in a surprise move that caught many investors off guard, pursued and acquired Twitter last year at a price of $44 billion. He now serves as the company’s CEO.


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James Thomas
James Thomas
Hello, I am James Thomas blogger and content creator who specializes in personal finance and investing at Business Advise. I have been writing for over 5 years and have built a large following of readers who value practical advice and actionable tips. I'm committed to helping people take control of their financial futures and achieve their goals.

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