Tesla stock prices spiked when CEO Elon Musk tweeted in 2018 that finance was in place to take the firm private, then plummeted as the deal collapsed. In January, investors filed a lawsuit against Musk, and after a civil trial lasting several weeks, the jury returned a verdict exonerating Musk on Friday.
Dissecting Musk’s intent was the crux of the argument. Musk considered taking Tesla private and tweeted, “Funding secured” in the first tweet cited at trial. Second, he tweeted, “Investor support verified,” while also noting that shareholders would ultimately decide on the idea.
To recoup their losses once the privatisation plan failed, investors sued Musk. According to The Washington Post, defence attorneys for the firm and its CEO contended at trial that the tweet about the money wasn’t entirely true but didn’t necessarily amount to fraud.
After a case filed by the SEC in 2018 was settled, with Musk and Tesla paying $40 million and committing to better governance due of the “funding secured” tweet, this judgement has now been issued. Musk, who just purchased Twitter, has found himself in similar situations on many occasions due to tweets.
Judge Edward M. Chen, who presided over the investor litigation that was settled on Friday, had previously decided that Musk’s tweet touting secured funding was inaccurate. However, the jury had the last say on whether Musk and Tesla’s board could be held accountable for the market’s reaction. The jury deliberated for two hours before reaching their verdict that they were not to blame for the upheaval that had resulted from the tweets.
According to the lawsuit, the plaintiffs said that Musk should be held to the same standards of financial accountability as everyone else.
According to the Post, during closing arguments, Musk’s lawyer Andrew Spiro stated, “Just because it’s a horrible tweet, doesn’t imply it’s fraud.”
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