Shareholders of Tesla Inc. suing Elon Musk’s 2018 tweet about taking the company private says it won a critical judgment ahead of a fraud trial with billions of dollars in damages.
Shareholders of Tesla Inc. suing Elon Musk’s 2018 tweet about taking the company private says it won a critical judgment ahead of a fraud trial with billions of dollars in damages.
Investors said a federal judge agreed with them that “no reasonable jury could find Musk’s tweets on August 7, 2018 to be accurate or not misleading. ,” according to a court filing late Friday. Records describing the judge’s April 1 order were not listed on the manifest.
Alex Spiro, an attorney for Musk and Tesla, said “it won’t change the fact that Elon Musk is considering opting for Tesla private and can be.”
“All that remains half a decade later is random plaintiffs’ attorneys trying to make money and others trying to prevent that truth from coming to light all harmful to freedom of speech. argument,” he said Saturday.
The ruling – if not appealed – will put the electric carmaker at a huge disadvantage in a San Francisco jury trial at the end of May because Tesla will not be allowed to challenge the controversial post. The controversy on Twitter is true. It will allow investors to focus primarily on connecting Musk’s claims to their stock market losses.
The decision is also a blow to the reputation of the world’s richest man as he continues to wage legal battles that other executives would avoid or settle. Adding to the spectacle, Musk is waging a hostile attempt to take control of Twitter Inc. with a commitment to make this platform a bastion of free speech.
Musk told a federal judge in New York in early March that he “would never lie to shareholders.” He asked the judge to release him from the social media restrictions he agreed to after the Securities & Exchange Commission sued him for fraud over 2018 tweets.
In San Francisco, shareholders suing securities fraud are asking US District Judge Edward M. Chen to ban Musk from making any public comment on his “explanation and opinion” on the matter. with the claims in their case until the end of the trial.
Investors were specifically targeting remarks Musk made during this week’s TED event in Vancouver. “I was unlawfully forced to give in to the SEC,” he said, and settled the agency’s lawsuit over a 2018 “funding-guaranteed” tweet.
Shareholders say Musk’s August 2018 tweets and subsequent tweets have cost them billions of dollars amid volatile Tesla stock prices. , while his lawyers countered that his post to his millions of followers was “completely honest”.
To counter allegations that the girl was fraudulent, Musk’s attorneys argued that Saudi Arabia’s sovereign wealth fund had agreed to support his effort to take Tesla private.
What Bloomberg Intelligence says
Theoretical damages could be up to $12 billion, but we think the settlement value could be $260-$380 million. – Holly Froum, Litigation Analyst
