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Elon Musk declares in the trial that the price of 420 dollars that he was going to offer in Tesla “was not a joke” | Economy

Sketch of Elon Musk in a federal court in San Francisco, during his appearance on January 20.
Sketch of Elon Musk in a federal court in San Francisco, during his appearance on January 20.Vicky Behringer (AP)

Elon Musk didn’t sleep well last night. It’s not clear if it was his second day testifying in the Tesla shareholder lawsuit, the troubles on Twitter or some other issue that kept him up at night, but he admitted to the jury: “Unfortunately, I’m not in my best moment”. Despite being out of shape, Musk has defended himself to the best of his ability against allegations that he misled investors by saying he had “secured funding” to launch a delisting bid for automaker Tesla. As he has stated, the price of $420 (a reference to marijuana) “was not a joke.”

“It is very important that the jury knows this. Very important,” Musk stressed. According to what was collected by the Bloomberg and Reuters agencies, present in the San Francisco courtroom where the trial is being held, its two lines of defense have been the ability to finance the operation with SpaceX shares and the alleged determined will of the Saudi sovereign wealth fund. PIF to participate in it. The businessman has focused almost all of his strategy on this second point.

The judge handling the case has already made it clear that the two words in the 2018 tweet (“secured financing”) were false, but for Musk to be sentenced to compensate investors, it must be shown that he had the will to deceive, that that tweet altered the price and that shareholders who invested in the heat of Musk’s alleged plans to launch an offer at $420 per share suffered losses.

Musk explained in his statement that he had a dinner in 2017 with his friend Larry Ellison, founder of Oracle, which also included executives from Goldman Sachs and the investment firm SoftBank and that Ellison supported the idea of ​​delisting Tesla, but the bulk of the interrogation this Monday has focused on whether there was an agreement closed with the Saudi fund to finance part of the exclusion bid.

When asked by the plaintiffs’ lawyer, Nicholas Porritt, Musk had to admit that there was nothing signed. However, the Tesla boss has assured time and again that there was already an agreement for him. “They have more money than the value of all Tesla,” he said, stressing that an investment of $5 billion or $10 billion would not be as relevant to the fund.

Musk’s problem is that in the investigation of the case, messages from the person in charge of the Saudi fund have been known saying that there was no agreement, that he needed the details of the operation to move forward. Musk, however, has declared that the person in charge of the fund assured him that he had already discussed the operation with the Saudi prince and that, therefore, he took it for granted: “If they say they are going to do something, they do it”, has stated. At the insistence of the plaintiffs’ lawyer to specify the content of the meetings in the summer of 2018 with those responsible for the Saudi fund, Musk has excused himself that five years have passed and he does not remember the details.

The marijuana “joke”

Musk has been asked about the price, $420 per share, which is the number used to refer to marijuana, and he has said it was a fluke. In the statement of objections of the Securities and Exchange Commission (the SEC), with which he reached an agreement to pay a fine of 20 million dollars for the famous tweet, it is stated that Musk thought of a 20% premium and that since it returned $419, he decided to round it up to $420 because “he had recently learned about the meaning of the number in marijuana culture and thought that his girlfriend [de entonces]’he would be amused, which is not a great reason to pick a price’, he admitted.

Today he has insisted that it was a coincidence: “I don’t know if she found it funny or not. But the price of 420 dollars was not a joke ”, she has defended herself. Musk offered $54.20 per share to buy Twitter, thereby somewhat repeating the marijuana number in his offer.

In Friday’s session, Musk tried to unlink his tweets from Tesla’s stock market movements. He argued that Twitter is “the most democratic way” to communicate with small investors, with information that he believes “the public should hear.” In the controversial August 7, 2018 tweet, Musk wrote: “I am considering delisting Tesla at $420. Secured financing”. After his first tweet, Musk insisted with others that suggested an imminent operation. “Shareholders can sell at 420 or keep the shares [en la compañía excluida de Bolsa]”, added.

Tesla’s shares skyrocketed (and sank when it was found that there was no takeover bid to exclude the company from the stock market), but Musk tried this Friday at trial to unlink that movement from his tweet. “Tesla stock goes up and down all the time,” he said at one point. “Just because I tweet something doesn’t mean people believe it or act on it,” he also argued.

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