Elon Musk depicted as liar, visionary in Tesla tweet trial

Jan 17, 2023, 5:06 PM | Updated: Jan 19, 2023, 4:22 am
A Tesla car is parked in a lot across the street from a federal courthouse in San Francisco, Wednes...

A Tesla car is parked in a lot across the street from a federal courthouse in San Francisco, Wednesday, Jan. 18, 2023. Elon Musk was depicted Wednesday as either a liar who callously jeopardized the savings of "regular people" or a well-intentioned visionary as attorneys delivered opening statements at a trial focused on a Tesla buyout that never happened. (AP Photo/Jeff Chiu)

(AP Photo/Jeff Chiu)

SAN FRANCISCO (AP) — Elon Musk was depicted Wednesday as either a liar who callously jeopardized the savings of “regular people” or a well-intentioned visionary as attorneys delivered opening statements at a trial focused on a Tesla buyout that never happened.

Lawyers on opposing sides drew the starkly different portraits of Musk for a nine-person jury that will hear the three-week trial. The case is focused on two August 2018 tweets that the billionaire posted on Twitter, which he now owns.

The tweets indicated that Musk had lined up the financing to take Tesla private at a time when the automaker’s stock was slumping amid production problems.

The prospect of a $72 billion buyout fueled a rally in the company’s stock price that abruptly ended a week later after it became apparent that he did not have the funding to pull off the deal after all. Tesla shareholders then sued him, saying that Tesla shares would not have swung so widely in value if he had not dangled the idea of buying the company for $420 per share.

Nicholas Porritt, a lawyer representing Glen Littleton and other Tesla shareholders in the class-action case, promptly vilified Musk as he addressed jurors.

“Why are we here?” Porritt asked. “We are here because Elon Musk, chairman and chief executive of Tesla, lied. His lies caused regular people like Glen Littleton to lose millions and millions of dollars.” He also asserted that Musk’s tweet also hurt pension funds and other organizations that owned Tesla stock at the time.

Musk’s lawyer, Alex Spiro, countered that the run-up in Tesla’s stock after the tweet mostly reflected investors’ belief in Musk’s ability to pull off stunning feats, including building the world’s largest electric automaker while also running SpaceX, a maker of rocket ships.

“Mr. Musk tries to do things that have never been done before. Everyone knows that,” Spiro told the jury.

Spiro added that Musk had been in advanced talks with representatives from Saudi Arabia’s Public Investment Fund to take Tesla private.

“He didn’t plan to tweet this,” Spiro said of Musk’s Aug. 7, 2018, statement at the heart of the trial. “It was a split-second decision” aimed at being as transparent as possible about the discussions with the Saudi fund about a potential deal.

After saying “funding secured” for the buyout, Musk followed up with another tweet that suggested a deal was imminent.

Littleton, a 71-year-old investor from Kansas City, Missouri, was the first witness called to the stand. He said Musk’s claim about the financing alarmed him because he had purchased Tesla investments designed to reward him for his belief that the automaker’s stock would eventually be worth far more than the $420.

He said he sold most of his holdings to cut his losses but still saw the value of his Tesla portfolio plunge by 75%.

“The damage was done,” Littleton lamented. “I was in a state of shock.”

Littleton’s frustration escalated in October 2018, when he lashed out at Tesla for late deliveries on vehicles for some of his nieces and nephews. That led him to become a lead investor in the lawsuit.

“I still believe in Tesla to this day. I do,” Littleton said.

During cross-examination, a lawyer for Tesla’s board of directors repeatedly questioned whether Littleton had legitimate reason to believe a buyout was inevitable, but the investor remained steadfast even while seeming confused at times.

“‘Funding secured’ was the only thing that mattered to me,” Littleton testified. “That was such a defining statement.”

Musk’s 2018 tweets attracted the attention of securities regulators, who concluded that they were improper and that he was lying. In a settlement, they forced him to pay $40 million and required him to step down as Tesla chairman.

U.S. District Judge Edward Chen, who is presiding over the trial, ruled that the shareholders’ lawyers can’t mention that settlement in the case.

But Chen has already ruled that Musk’s tweet was false, a finding that can be alluded to during the trial without specifically mentioning the determination made by the judge. Pollitt seized on that opportunity during his opening statement, informing jurors that they are to assume Musk’s tweet was false, as the judge allowed. Spiro shook his head as he listened.

The trial’s outcome may turn on the jury’s interpretation of Musk’s motive for the tweets. And Musk will have his chance to make his case to the jury.

After the trial adjourned Wednesday, Porritt told The Associated Press he hopes to call Musk to the stand when the proceedings resume Friday after two other witnesses testify. If the allotted time runs out Friday, Musk will likely testify Monday, Porritt said.

Musk’s leadership of Twitter — where he has gutted the staff and alienated users and advertisers — has proven unpopular among Tesla’s current stockholders, who are worried that he has been devoting less time to automaker at a time of intensifying competition.

Those concerns contributed to a 65% percent decline in Tesla’s stock last year that wiped out more than $700 billion in shareholder wealth — far more than the $14 billion swing that occurred between the company’s high and low stock prices from Aug. 7 to Aug. 17, 2018, the period covered in the lawsuit.

Tesla’s stock has split twice since then, making the $420 price cited in his 2018 tweet worth $28 on adjusted basis now. The shares closed Wednesday at $128.78, down from the company’s November 2021 split-adjusted peak of $414.50.

After Musk dropped the idea of a Tesla buyout, the company overcame a production problem, resulting in a rapid upturn in car sales that caused its stock to soar and made Musk the world’s richest person until he bought Twitter. Musk dropped from the top spot on the wealth list after a stock market backlash to his handling of Twitter.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Britain's Prime Minister Rishi Sunak speaks with NHS Chief Executive Amanda Pritchard, right, in th...
Associated Press

UK’s Sunak defends handling of ethics breaches in government

LONDON (AP) — British Prime Minister Rishi Sunak defended his record on integrity and decisiveness Monday, amid criticism of the way he has handled ethics scandals involving senior Conservatives. Sunak said he acted “pretty decisively” to fire party Chairman Nadhim Zahawi on Sunday after the government’s standards adviser found that he’d breached ministerial conduct rules […]
1 day ago
Associated Press

Japan ex-soldier sues gov’t, colleagues over sexual abuse

TOKYO (AP) — A former Japanese soldier who reported being sexually abused by military colleagues said Monday she has filed a damage suit against five perpetrators and the government because she feels their earlier apologies were empty. Rina Gonoi went public with her experience last year, demanding the Defense Ministry reinvestigate her case, in which […]
1 day ago
Associated Press

Birthday party shooting in South Africa kills 8, injures 3

JOHANNESBURG (AP) — South African police are investigating a weekend shooting where eight people were killed and three injured after armed men opened fire at a house birthday party in the city of Gqeberha, formerly known as Port Elizabeth. According to police spokeswoman Priscilla Naidu, unknown gunmen entered a residential home in Kwazakhele township and […]
1 day ago
Associated Press

French prime minister unveils plans to tackle racism

PARIS (AP) — Name it, act on it, sanction it. That is the focus of a new plan announced on Monday by French Prime Minister Elisabeth Borne to defeat long-standing racism, anti-Semitism and discrimination of all kinds. The four-year plan starts with educating youth with a required yearly trip to a Holocaust or other memorial […]
1 day ago
Associated Press

This Week: Fed rates, Alphabet earnings, employment update

A look at some of the key business events and economic indicators upcoming this week: WATCHING THE FED The Federal Reserve will meet this week and announce its latest interest rate decision on Wednesday. The central bank is expected to raise its benchmark interest rate by a quarter percentage point, which would mark a downshift […]
1 day ago
Associated Press

Turkey’s opposition vows more democracy if it wins election

ANKARA, Turkey (AP) — A coalition of six Turkish opposition parties striving to end two decades of rule by President Recep Tayyip Erdogan on Monday reaffirmed a commitment for a return to parliamentary democracy should their alliance win elections that are likely to be held on May 14. In a ceremony in Ankara, the six […]
1 day ago

Sponsored Articles

safety from crime...

As crime increases, our safety measures must too

It's easy to be accused of fearmongering regarding crime, but Seattle residents might have good reason to be concerned for their safety.
Comcast Ready for Business Fund...
Ilona Lohrey | President and CEO, GSBA

GSBA is closing the disparity gap with Ready for Business Fund

GSBA, Comcast, and other partners are working to address disparities in access to financial resources with the Ready for Business fund.
SHIBA WA...

Medicare open enrollment is here and SHIBA can help!

The SHIBA program – part of the Office of the Insurance Commissioner – is ready to help with your Medicare open enrollment decisions.
Lake Washington Windows...

Choosing Best Windows for Your Home

Lake Washington Windows and Doors is a local window dealer offering the exclusive Leak Armor installation.
Anacortes Christmas Tree...

Come one, come all! Food, Drink, and Coastal Christmas – Anacortes has it all!

Come celebrate Anacortes’ 11th annual Bier on the Pier! Bier on the Pier takes place on October 7th and 8th and features local ciders, food trucks and live music - not to mention the beautiful views of the Guemes Channel and backdrop of downtown Anacortes.
Swedish Cyberknife Treatment...

The revolutionary treatment of Swedish CyberKnife provides better quality of life for majority of patients

There are a wide variety of treatments options available for men with prostate cancer. One of the most technologically advanced treatment options in the Pacific Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform at Swedish Medical Center.
Elon Musk depicted as liar, visionary in Tesla tweet trial