HomeEntertainmentElon Musk’s Lawyers Say His Claims About Taking Tesla Private Were ‘Entirely Truthful’

Elon Musk’s Lawyers Say His Claims About Taking Tesla Private Were ‘Entirely Truthful’

by Jennifer Shea
Patrick Pleul/picture alliance via Getty Images

In 2018, Tesla CEO Elon Musk sent out a fateful tweet claiming that he planned to take Tesla private and had secured funding to do so. Tesla shares jumped 13 percent after Musk’s tweet. But they soon dropped back down to Earth as the Securities and Exchange Commission (SEC) accused Musk of securities fraud.

“Am considering taking Tesla private at $420. Funding secured,” Musk’s tweet read. Yet the funding never materialized. And any deal that Musk might have been working on fell through.

Musk wound up paying $40 million in fines to the SEC. He also resigned as chairman of Tesla’s board and agreed to let lawyers check over any future tweets concerning the company’s financial condition. As if that weren’t enough, Tesla stockholders filed a class-action lawsuit in California.

Now the New York Post has obtained court documents in that class-action lawsuit that show Musk and his attorneys arguing that Musk’s claims were “entirely truthful” at the time. The deal he was apparently contemplating was with Saudi Arabia’s sovereign fund.

Meanwhile, the Saudi Arabia Public Investment Fund, which had bought a 5 percent stake in Tesla on that day in 2018, dumped all of its Tesla shares in early 2020.

Elon Musk Claims He Shared Saudi Arabia’s Offer with the Tesla Board

“Elon Musk’s August 7, 2018 tweet informing the public that he was considering taking Tesla private was entirely truthful,” Musk’s attorneys wrote in their court filing. “Mr. Musk was considering taking Tesla private at $420 a share. Funding was secured. There was investor support.”

“Mr. Musk firmly believed funding was secured when he tweeted,” they went on. “Per Mr. Musk’s discussions with the Saudi Arabia sovereign fund, it was secured.”

The attorneys further argued that Musk went to the Tesla board with Saudi Arabia’s $420 per share offer. (The offer represented a 20 percent premium on where the stock was trading at that point.) And he did that before he sent the tweet. But Musk reportedly relied on his own financial and legal team to engineer the deal.

Most of the court documents are redacted, including the names of Musk’s personal advisers on the deal.

SEC Has Since Chastised Musk for Violating the Terms of His Settlement

Musk also found himself in a bit of trouble in the spring of 2020 when tweeting about Tesla’s financials without consulting attorneys first. Musk’s tweet, which argued that Tesla’s stock price was “too high,” triggered a $13 billion drop in Tesla’s market value, CNBC reports.

SEC regulators who were monitoring Musk’s social media accounts reportedly chastised Musk in private correspondence but did not file a legal motion over Musk’s boundary-pushing.

The SEC also complained about 2019 tweets in which Musk talked about solar roof production numbers without getting the all-clear from his “Twitter sitter” first. The SEC settlement agreement, reached in 2019, apparently does not specify a date on which Musk’s Twitter probation expires.