Elon Musk dodged a multibillion-dollar bullet on Friday as a jury ruled that he was not liable for any losses Tesla investors suffered after Musk posted on Twitter in 2018 that he would take the electric vehicle company private.
The $72 billion deal never took place, and shareholders subsequently accused Musk of misleading them, according to the BBC.
Two posts by Musk from August 2018 sent Tesla stock soaring, The New York Times reported.
In one, Musk wrote, “Am considering taking Tesla private at $420. Funding secured.” He followed that with, “Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote.”
Three weeks later, the stock plummeted because the deal never happened.
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The San Francisco jury deliberated for less than two hours before reading their verdict, according to the BBC.
Musk might have been on the hook for billions of dollars in damages had he lost the case.
Judge Edward Chen, who was hearing the civil suit, had ruled that the words “funding secured” in the first post and Musk’s entire second post were not true, and that Musk was reckless when he posted them.
Do you agree with the jury’s decision?
Yes: 95% (21 Votes)
No: 5% (1 Votes)
With that as the backdrop, Adam C. Pritchard, a law professor at the University of Michigan, said Musk’s win defied the odds.
“I thought he was crazy to try his chances at trial, given the stakes involved. … You’re fighting with one hand behind your back in that situation — and yet he won,” he said.
“Thank goodness, the wisdom of the people has prevailed!” Musk tweeted.
Thank goodness, the wisdom of the people has prevailed!
I am deeply appreciative of the jury’s unanimous finding of innocence in the Tesla 420 take-private case.
— Elon Musk (@elonmusk) February 3, 2023
Nicholas Porritt, a lawyer for the plaintiffs, was less upbeat.
“We are disappointed with the verdict and considering next steps,” he said.
After the verdict, as jurors answered questions from lawyers for the defeated plaintiffs, one juror said their case never connected.
“There was nothing there to give me an ‘aha’ moment,” the juror said. “Elon Musk is a guy who could sneeze and the stock market could react.”
The investors contended Tesla was nowhere near going private.
“This case is about whether rules that apply to everybody else should apply to Elon Musk,” Porritt said during the trial.
Musk’s legal team said the truth was a defense because Musk was in fact considering taking the company private.
Musk said he thought funding from a Saudi Arabian fund would materialize, but it did not.
Musk and Tesla eventually paid $40 million in fines to the Securities and Exchange Commission over the tweets about the plan to take Tesla private. That settlement gave rise to a requirement Musk is trying to remove in which a lawyer reviews certain statements about Tesla before Musk posts them.
