Musk not liable for losses after tweet about delisting Tesla

EPA

NOS Nieuws•vandaag, 02:19

Elon Musk did not mislead investors when he announced on Twitter in 2018 that he planned to take his car company Tesla private. That has been determined by a jury in San Francisco in a case that investors had jointly brought against him. They wanted to see billions from Musk, but have now been unsuccessful.

The case revolves around a message from Musk on Twitter, in which he announced in August 2018 that he had secured funding to take Tesla private. He claimed to offer $420 a share to get it done, which was about $80 above the opening price.

The message led to a run on Tesla shares, which drove up the price considerably. When it later became clear that Tesla would not be delisted at all, the price fell again. Investors would have collectively lost up to $12 billion from Musk’s tweet and were outraged.

Million settlement

The American financial markets regulator (SEC) also found the Twitter message unacceptable and sued Musk. In the end, Musk and Tesla settled the case for $40 million and Musk stepped down as Tesla chairman for a three-year term.

In the case in which Musk has now been acquitted, he also had to testify himself in the past three weeks. He stated that he thought he had verbal commitments from the Saudi sovereign wealth fund Public Investment Fund, but that fund had later backtracked. “Just because I tweet something doesn’t mean people believe it or act on it,” Musk said.

‘A bad tweet does not make fraud’

“Our society is based on regulations. We need rules to protect us from anarchy and the rules should apply to Elon Musk as well,” the lawyer for the Tesla shareholders in the case appealed to the jury’s sense of justice. “A bad tweet doesn’t make fraud,” Musk’s lawyer retorted.

Musk was not present when the jury unanimously pronounced its verdict, but is pleased. “Thank God, a victory for the wisdom of the people.” The duped shareholders are considering an appeal.

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