Twitter chief Elon Musk told a San Francisco court that he believed he had secured the funds to take Tesla private in 2018 and could have used his stake in rocket company SpaceX to fund a buyout.
Musk’s response came during a court hearing in a lawsuit filed by Tesla investors alleging that he misled them with a tweet saying funding was secured to take Tesla private for $420 per share.
In his 2018 tweet, Musk said funding has been secured for $72 billion of Tesla at a time when the electric automaker was still grappling with production problems and was worth far less than it is now. He later said the deal was imminent.
“With SpaceX stock alone, I felt funding was secured for the buyout,” he told a jury, referring to SpaceX. He added later that he chose not to take Tesla private due to a lack of support from some investors and a wish to avoid a lengthy process.
As it turned out, the “deal” never happened and his statements allegedly saddled investors with losses.
A jury will now decide whether the Tesla CEO artificially inflated the company’s share price by touting the buyout’s prospects, and if so by how much.
‘SOME KARMA’
Nicholas Porritt, a lawyer representing Tesla shareholders, asked Musk if he went with 420 because “it was a joke your girlfriend enjoys. Elon Musk replied he thinks there is “some karma” around the number 420 — which is also a slang reference to marijuana — although he added he doesn’t know “if it’s good karma or bad karma at this point.”
He then said the number was a “coincidence” and it represented a 20% premium of Tesla’s share price at the time.
After it became apparent that the money wasn’t in place to take Tesla private, Musk stepped down as Tesla’s chairman while remaining CEO as part of a settlement, without acknowledging wrongdoing.