Elon Musk Wins Trial Over ‘Funding Secured’ Tesla Tweet: Report

  • A jury found investors didn’t prove Elon Musk derailed them together with his tweet that he had “funding secured” to take Tesla private, per the WSJ. 
  • The final result vindicated Musk, who had argued that he didn’t imagine his tweet influenced Tesla’s stock price.
  • Tesla investors had alleged that his public statements resulted in billions of dollars in damages.

Elon Musk was reportedly vindicated late Friday Friday when a federal jury found that Tesla investors didn’t prove that he derailed them with a 2018 tweet that he had “funding secured” to take the electrical carmaker private, a deal that never materialized. 

The nine-person jury arrived on the conclusion shortly after deliberations began, per a Wall Street Journal report. 

The decision was the culmination of a civil trial in San Francisco federal court, through which jurors heard testimony from high-profile witnesses including Musk himself, together with Tesla’s former chief financial officer Deepak Ahuja, and Musk’s former chief of staff Sam Teller.  

Musk’s defense highlighted his meeting in July 2018 with Yasir Al-Rumayyan, an official in Saudi Arabia’s Private Investment Fund, through which he said Al-Rumayyan had committed to helping to finance the deal. Those verbal assurances partially led him to tweet that he had “funding secured” for a take-private deal for Tesla, he told jurors last month. 

Nicholas Porritt of Levi & Korsinsky LLP, an attorney for Tesla’s shareholders, had challenged that narrative. In closing arguments Friday, Porritt told the jury that a conversation over financing, which he estimated could possibly be to the tune of $60 billion, would have needed to at the very least be put in writing, yet Musk took no notes. 

“Sometimes we substitute what we wished happened for what actually happened,” Porritt argued in court. “That may occur if you’re facing government investigations and lawsuits for billions of dollars.”

Musk’s tweet, which he posted in August 2018, read, “Am considering taking Tesla private at $420. Funding secured.” 

In closing arguments, Musk’s attorney, Alex Spiro of Quinn Emanuel Urquhart & Sullivan, argued that Musk’s adversaries had painted him as a “fire-breathing dragon” and that the billionaire couldn’t be faulted for being a “bad Tweeter.”

Before the trial, US District Judge Edward Chen had ruled that the billionaire’s tweets ought to be considered “unfaithful,” but that jurors had to make a decision in the event that they were “material.” In securities parlance, that meant jurors had to contemplate whether Musk’s statements were significant enough to influence investors’ trading decisions.

Musk’s statements concerning the potential deal also drew the eye of securities regulators, who in September 2018 extracted a $40 million penalty from Musk and the corporate, and said he could not helm Tesla’s board. 

Porritt, the Tesla investors’ attorney, had framed the stakes of the case in sweeping, existential terms, arguing that it got here right down to an issue of whether regular investors could trust the general public markets. 

“Whether it’s the securities markets or a football game, rules have to be fair and have to be applied to everyone,” he told the court on Friday. “And this case, ultimately, is about whether the principles that apply to everyone else must also apply to Elon Musk.”

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