United States: The Tesla investors’ lawyer has claimed that CEO Mr. Elon Musk “lied” about having funding in place to take the company private, costing his clients millions of dollars.
In 2018, the company’s CEO stated that he had “secured” funding to take the electric carmaker private, and later that investor backing was “confirmed,” causing shares to fall and then soar. Four years after Musk’s tweets mentioned he had secured funding to buy the electric car maker at $420 a share, investors who felt angered by the misleading statements began to make their case in San Francisco court.
“Elon Musk, Tesla’s chair and chief executive, lied,” attorney Mr. Nicholas Porritt, who represents Mr. Glen Littleton and other investors in the automaker, commented.
Mr. Glen Littleton is asking for compensation on behalf of shareholders who bought or sold stock in the days after the tweets, claiming the CEO’s tweets cost them “millions.”
During opening statements, Mr. Nicholas Porritt, the lead attorney for the investors, informed a San Francisco jury that “millions of dollars were lost when [Musk’s] lies were exposed.”
However, a lawyer for Musk argued in court that the billionaire merely used the “wrong words” when he tweeted about his plans. Mr. Alex Spiro, representing Musk, claimed that the billionaire was “serious” about taking the company private in 2018, but ultimately faced shareholder opposition.
A jury of nine will decide whether Mr. Musk’s tweets artificially inflated Tesla’s share price by playing up the status of funding for the deal. The jury will be tasked with deciding whether Musk’s tweets influenced investors, whether he acted knowingly, and whether damages should be awarded.
Recently, the judge, Mr. Edward Chen, denied a request by Musk to have the case moved to Texas, with the billionaire expressing concern that potential jurors in California would be biased against him.
The judge has already ruled that the statements the SpaceX owner made were untrue, but the defendants will argue that he had good reason to believe funding for taking Tesla private was secured.
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