Tesla Inc (NASDAQ.TSLA) planned privatisation in 2018. However, Elon Musk used “wrong words” according to lawyers representing him at a San Francisco trial.
Tesla investors claim that Musk has lost millions of dollars after he claimed in 2018 that he had the US$72bn financing needed to take Tesla private.
He claimed that he also had investor support for the deal.
Musk’s claims weren’t confirmed, however, and a deal to turn the electric car giant into a private company was never made.
Musk is being sued by investors for damages they claim to have suffered from his tweets. Investors argue that they were misled and therefore believe he committed fraud.
Alex Spiro was Musk’s lawyer. He said that “you will soon learn that this wasn’t fraud, not even close.” While Musk’s tweet contained “technical inaccuracies”, he “used incorrect words.”
Lawyer Nicholas Porritt, on the other hand, accused Musk of lying. He claimed that “Millions were lost when [his] lies became public.” As shareholders raced to sell their positions, they also lost millions of dollars.
Tesla shares plummeted and then rose by around 11% following his tweet. The US Securities and Exchange Commission fined Tesla and Musk US$40mln each and forced him to resign as chairman.
Musk could be called to testify when the trial resumes Friday. Tesla’s share price fell 2% to US$128.8 on the first day.