Elon Musk told jurors on Monday that he was confident he had secured financial backing from Saudi investors in 2018 to take Tesla Inc private, and that he could even have used his stake in rocket company SpaceX to fund a buyout.
During a five-hour trial in federal court in San Francisco, the billionaire, who claimed he was tired from a lack of sleep, spoke quietly and calmly.
“With SpaceX stock alone, I felt funding was secured” for the buyout, he told a jury, referring to the aerospace company where he is also CEO, without giving any details.
However, the plaintiff investors’ lawyer, Nicholas Porritt, questioned whether he intended to use his SpaceX stake to fund the deal, which would have increased his stake in Tesla. According to Porritt, Musk told Tesla employees at the time that he expected his stake in Tesla to remain similar after the deal.
Musk is defending himself against allegations that he defrauded investors when he tweeted on August 7, 2018, that he had “funding secured” to take Tesla private at $420 per share and that “investor support is confirmed.” Musk later explained that he decided against taking Tesla private due to a lack of support from some investors and a desire to avoid a lengthy process.
The trial puts Musk’s penchant for taking to Twitter to air his sometimes irreverent views to the test, as well as when the world’s second-richest person can be held accountable for crossing a line.
Tesla’s stock price soared following Musk’s 2018 tweets, only to plummet when it became clear that the buyout would not take place. As a result, investors claim to have lost millions of dollars.
Musk told Porritt that on July 31, 2018, he met with representatives of Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, at Tesla’s Fremont, California, headquarters.
He acknowledged that a takeover price was not discussed, but said Saudi representatives stated unequivocally that they would go to any length to make a buyout happen.
That never happened, according to Musk, because the fund’s governor, Yasir Al-Rumayyan, later reversed his commitment to take Tesla private.
“I was very upset because he had been unequivocal in his support for taking Tesla private when we met and now he appeared to be backpedaling,” Musk testified.
Al-Rumayyan’s lawyers did not immediately respond to a request for comment.
Porritt later told the court that written evidence did not support Musk’s claim about the Saudis’ original intentions, citing meeting minutes that showed the Saudis wanted to learn more about what Musk had in mind.
Tesla delivers the first vehicles produced at its new Gruenheide plant.
Musk later testified that he would have sold his SpaceX stake to fund the go-private deal, just as he did with his Tesla stake last year to help fund his bid to take Twitter private.
He is scheduled to testify for the third time this week.
(Adapted from MoneyControl.com)