adminA trial into a tweet by Elon Musk alleging that he would take Tesla private in a $72 billion buyout was set to begin yesterday.
Musk is being sued by Tesla shareholders, who say that he manipulated the share price of the company.
In 2018, he tweeted that he had “funding secured” to take the carmaker private.
However the funding was not secured – and Tesla was not taken private.
Shareholders argued that they lost billions of dollars due to the tweet after the share price plummeted.
The Tesla CEO, however, argued that he believed he had secured funding from Saudi Arabia’s Investment Fund, and did not commit securities fraud.
If a San Francisco jury rules in the shareholder’s favour, Musk may be ordered to pay billions of dollars in damages.
He has already paid $20m to the Securities Exchange Commission (SEC) for the 7 August 2018 tweet, while Tesla had to pay another $20m.
The SEC also removed Musk as chairman of Tesla as a result of the tweet.
His tweet has become legendary in Silicon Valley, as it showed the sheer power that 140 characters on Twitter can have.
Legal experts said they believe it will be a difficult case for Musk to win, and that the fine he paid to the SEC will be used against him in the case.
However jury trials in cases of fraud are notoriously difficult to predict.
Musk had wanted the trial to be moved to Texas, arguing a fair jury would not be possible to find in San Francisco.
He argued that mass sackings at Twitter, a company he bought last year, affected many employees in San Francisco – and that he is not popular in the city.
Musk’s team had argued that a significant majority of potential jurors said they viewed the billionaire negatively.
However, the judge said the trial would go ahead in California.
The trial may see Musk give evidence under oath. The witness list also includes Oracle’s CEO Larry Ellison and media tycoon James Murdoch. – BBC.
Mathew Masinge
Online Reporter