I Elon Musk’s tweets have taken center stage at the financial fraud trial in which several Tesla investors seek compensation, through a class action. According to the indictment, “his lies have caused the loss of millions and millions of dollars to ordinary people”. While for the defense, his tweets only prove “a wrong choice of words” che basically “didn’t matter”.
Elon Musk and his tweets on trial for financial fraud
The pen may not be sharper than a sword, but a smartphone keyboard may have caused it loss of several million dollars. At least that’s what the lawyer claims Nicholas Porrittrepresenting several Tesla investors who are taking the company’s CEO, Elon Musk, to court.
It all begins in 2018, when Musk seemed intent on privatizing Tesla, buying all market shares. The CEO had tweeted “Considering privatizing Tesla at $420. Find the funds“. These last words allegedly cost several investors millions of dollars, according to the indictment.
“No his lies they caused ordinary people, like Glen Littleton, to lose millions and millions of dollars,” Porritt explains. And for this it is “critical that he – and his company – is held responsible”.
According to Porritt, the tweet is particularly guilty because in reality the research of the SEC (Securities and Exchange Commission) would have shown that there were no real plans to privatize the company. And Musk didn’t even notify Tesla’s board of directors before tweeting.
What is the value of a tweet?
If the prosecution wants to use a tweet as evidence, the defense, led by attorney Alex Spiro, claims the exact opposite. First, he explains that Musk’s statement was honest: there was a privatization project underway. And his “funding secured” didn’t mean that he raised the funds, just that financial coverage “wouldn’t have been a problem”. Musk would simply have chosen the words wrong.
And more generally, Spiro doesn’t think Elon Musk’s tweets have legal value in a financial fraud trial. “These tweets are informal, sporadic thoughts”. So while Musk used terms that implied an ongoing takeover process, in reality they were little more than a “joke” and that “it doesn’t matter.”
According to Musk’s attorney, “Twitter haikus don’t move the market. THE CEOs who know how to achieve what they decide to pursue, satisfying their own considerations: this moves the market”.
Tesla investors
After the opening speeches by the attorneys, the remainder of the first day of the trial featured testimony from Glenn Littletona 71-year-old Kansas City investor who sold his Tesla shares after reading Musk’s tweet.
“That’s the tweet that started it all,” Littleton explains. According to which that “found the funds” written by Musk has “made privatization more definitive, completely final in my mind.” Littleton, che owns several Teslas and continues to believe in the company, he would have sold the shares of the company and now hopes to “recover the losses that were incurred by that tweet”.
Tesla and Musk stand to lose billions of dollars in settlements if they lose the lawsuit. The judge will have to consider whether Musk has duped investors or not with that tweet: We will keep you posted on the outcome of this lawsuit.