Elon Musk told court Saudi Arabia wanted to privatize Tesla for $420 ‘no joke’

On Monday, Elon Musk said he believes he has the funding to privatize Tesla Inc. in 2018 from both a Saudi Arabian investment fund and his stake in SpaceX, and one of his key tweets about it was “absolutely true.”

Tesla’s CEO has resumed testimony in a San Francisco federal lawsuit over investor losses allegedly caused by tweets he posted in 2018, including his “funding secured” tweet.

According to Musk, representatives of the Saudi Arabian Sovereign Investment Fund “have made clear their intention to move forward.” He also mentioned his large stake in the private aerospace company SpaceX and that “the funding itself was secured.”

Musk appeared agitated at times during hours of interrogation by lead plaintiff’s attorney, Nicholas Porritt.

Asked about the correspondence between him and Yasser Al Rumayan, the top sovereign wealth fund chief, Musk said the messages were essentially “covering your ass, for lack of a better word” by the Saudi Arabian executive.

Musk said he was “angry” and “very upset” about Al Rumayan’s “retreat,” a word Musk repeated several times. “Anyone would be mad at that,” Musk said.

“My tweet was true, absolutely true,” Musk said, referring to the “funding secured” tweet. Not only because of the understanding with the Saudi foundation, but also because of SpaceX, Musk repeated.

Last year, Musk sold shares in Tesla to buy Twitter Inc., and “I would have done the same here,” he said.

Early this morning, under cross-examination by his lawyer, Alex Spiro, Musk said he “never” tried to defraud Tesla shareholders and used SpaceX as a model to secure their further investment in privately owned Tesla.

“I thought it would be good for shareholders to take Tesla private,” Musk said. “We have come under unprecedented attack from short sellers.”

Prompted by Spiro, Musk also cited previous testimony and said that Google’s parent company Alphabet Inc. Google,
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gug,
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had an “ongoing interest” in buying Tesla, which influenced his idea to take the electric car maker private at the time.

Tesla CLA,
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Shares rose on Monday after Musk’s speech, ending the trading day up 7.7% and the highest since Dec. 19. Shares traded as high as $143.50, the highest intraday price since Dec. 20.

Musk told the court that the $420-per-share price in the deal “was a coincidence,” as it was roughly a 20 percent premium over Tesla’s stock price at the time, and “this is no joke.”

In certain circles, the number 420, pronounced four-20, refers to the use of marijuana.

Plantiff’s attorney, Porritt, also asked several questions that led Musk to say he hasn’t talked to major Tesla shareholders like Bailey Gifford and T. Rowe Price about the possibility of Tesla being privatized. Musk also said he could not recall the details of the conversation he had with the board about the plan.

Launching the now-famous “funding secured” tweet was a way to get ahead of a forthcoming Financial Times article that a Saudi fund had acquired a large stake in Tesla, as well as a way to inform all Tesla investors, Musk. said. What’s more, he tweeted that he was “considering” the move, “without saying it would be done,” Musk told the court.

Musk gave a brief testimony Friday before the court adjourned for a day, doing his best to make it clear that his tweets were not always taken literally. The trial began last week and is expected to continue into February.

“Just because I tweet something doesn’t mean people believe it or act accordingly,” Musk told the defense lawyer Friday.

The lawsuit revolves around Musk’s August 2018 tweets, including one in which he told his millions of Twitter followers that he was “considering a $420 Tesla privatization” and then added “funding secured.” The plan later failed.

Investor Glen Littleton, the lead plaintiff in the case, claims he lost money due to false tweets and is seeking damages.

U.S. District Judge Edward Chen has already ruled that Musk’s tweets about Tesla’s privatization are untrue and that Musk acted recklessly.

However, the jury must decide whether the tweets were material to investors and whether the misreporting resulted in losses for investors.

The CEO and Tesla were each fined $20 million by the SEC in September 2018 to settle civil lawsuits over “secured funding” tweets, and Musk was stripped of his chairmanship of Tesla.

Musk and Tesla agreed to settle the charges against them without admitting or denying the SEC’s allegations.

Musk’s proposal to end the SEC settlement over Tesla’s tweets was rejected last year.

Tesla shares have lost 55% over the past 12 months, compared to losses of about 9% for the S&P 500 SPX index.
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