Elon Musk testified Monday he believed he had funding secured to take Tesla Inc. private in 2018, both from a Saudi Arabian investment fund and from his stake in SpaceX, and that one of his key tweets on the matter was “absolutely truthful.”
The Tesla chief executive resumed testimony in a federal trial in San Francisco over investor losses allegedly caused by tweets he fired off at the time, including his “funding secured” tweet.
Representatives of Saudi Arabia’s sovereign investment fund “were unequivocal about moving forward,” Musk said. He also mentioned his large stake in privately held aerospace company SpaceX, and that “alone meant funding was secured.”
Musk appeared flustered at times under the hours-long examination from lead plaintiff’s attorney Nicholas Porritt. Under shorter examination by his own attorney, Alex Spiro, the billionaire sought to establish himself as a trustworthy go-getter whom investors have relied on for decades and across several business ventures.
“I think I raised more money than anyone in history at this point,” Musk said.
The testimony was also punctuated by expressions not often heard in a court of law.
When questioned about texts between himself and Yasir Al-Rumayyan, the sovereign-wealth fund’s top executive, Musk said the texts were essentially “ass covering, for lack of better word,” on the Saudi executive’s part.
Musk went on to say that he became “angry” and “very upset” at what he perceived as Al-Rumayyan’s “backpedaling,” a word Musk went on to repeat several times.
“My tweet was truthful, it was absolutely truthful,” Musk said, referring to the “funding secured” tweet. Not just because of the understanding with the Saudi fund but also because of SpaceX, Musk repeated.
Last year, Musk sold Tesla stock to buy Twitter Inc., and “I would have done the same here,” he said.
In the early afternoon, under Spiro’s questioning, Musk said that he had “never” tried to deceive Tesla shareholders, and had SpaceX as a model to ensure their continued investment in a private Tesla.
“I thought it would be good for the shareholders to take Tesla private,” Musk said. “We were under an unprecedented attack from short sellers.”
And under Spiro’s prompt, Musk also referred to a previous deposition and said that Google parent Alphabet Inc. GOOGL,
Earlier in the day, Musk told the court that the $420-a-share price on the deal “was a coincidence” as it was roughly a 20% premium over Tesla’s stock price at the time, and “not a joke.”
In certain circles, the number 420, pronounced four-20, refers to marijuana use.
Plantiff’s lawyer Porritt also asked several questions that led Musk to say he hadn’t talked to major Tesla shareholders such as Baillie Gifford and T. Rowe Price about possibly taking Tesla private. Musk also said he couldn’t recall specifics around speaking with the board about the plan.
Firing off the now famous “funding secured” tweet was a way to stay ahead of a soon-to-be-run Financial Times story about the Saudi fund taking a large stake at Tesla and as a way to keep all Tesla investors informed, Musk said. Moreover, he tweeted that he was “considering” the move, “not saying that it would be done,” Musk told the court.
Musk had given brief testimony Friday before the court adjourned for the day, taking pains to make clear that his tweets are not always taken to the letter. The trial started last week and it is expected to go into February.
The trial revolves around Musk’s tweets from August 2018, including one where he told his millions of Twitter followers he was “considering taking Tesla private at $420” and then added “funding secured.” The plan later fizzled out.
Investor Glen Littleton, the lead plaintiff in the case, alleges he lost money due to the false tweets and is seeking damages.
U.S. District Judge Edward Chen already has ruled that Musk’s tweets about taking Tesla private were not true and that Musk acted with recklessness.
It is still up to jurors to decide, however, if the tweets were material to investors and if the falsehoods caused investor losses.
The CEO and Tesla each were fined $20 million in September 2018 by the SEC to settle civil charges around the “funding secured” tweets and Musk was stripped of his chairman role at Tesla.
Musk and Tesla agreed to settle the charges against them without admitting to nor denying the SEC’s allegations.
Musk’s bid to end the SEC settlement deal over the Tesla tweets was denied last year.
Tesla shares have lost 55% in the past 12 months, compared with losses of around 9% for the S&P 500 index SPX,