SAN FRANCISCO (AP) — Elon Musk was portrayed Wednesday as a liar who endangered the economies of “normal people” or a well-intentioned visionary, as lawyers made opening statements in a trial focused on a Tesla purchase that never happened.
Lawyers from the opposing sides have drawn very different portraits of Musk for a nine-person jury that will hear the three-week trial. The case is focused on two tweets from August 2018 that the billionaire published on Twitter, which he now owns.
The tweets indicated that Musk had lined up financing to take Tesla private at a time when the automaker’s stock was falling amid production problems.
The prospect of a $72 billion purchase fueled a rally in the company’s stock price that ended abruptly a week later after it became apparent it did not have the financing to make the next deal. Tesla shareholders blamed him, saying that Tesla shares would not have changed so widely in value if he had not floated the idea of buying the company for $420 per share.
Nicholas Porritt, an attorney representing Glen Littleton and other Tesla shareholders in the class-action case, quickly vilified Musk as he addressed jurors.
“Why are we here?” Porritt asked. “We are here because Elon Musk, chairman and CEO of Tesla, lied. His lies caused regular people like Glen Littleton to lose millions and millions of dollars. He also claimed that Musk’s tweet also hurt the pension funds and other organizations that owned Tesla shares at the time.
Musk’s lawyer, Alex Spiro, responded that the rise in Tesla shares after the tweet mainly reflected the belief of investors in Musk’s ability to make amazing feats, including building the largest manufacturer of the world’s electric cars while running SpaceX, a rocket ship manufacturer.
“Mr. Musk is trying to do things that have never been done before. Everyone knows that,” Spiro told the jury.
Spiro added that Musk had been in advanced discussions with representatives of Saudi Arabia’s Public Investment Fund to take Tesla private.
“He didn’t mean to tweet that,” Spiro said of Musk August 7, 2018, statement at the heart of the process. “It was a split-second decision” aimed at being as transparent as possible about discussions with the Saudi fund about a potential deal.
After saying “secured financing” for the purchase, Musk followed through with another tweet which 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 claims about the funding alarmed him because he had bought Tesla investments designed to reward him for his belief that the automaker’s stock would eventually be worth much more than $420.
He said he sold most of his holdings to cut his losses, but still saw the value of his Tesla portfolio drop by 75%.
“The damage is done,” Littleton lamented. “I was in a state of shock.”
Littleton’s frustration grew in October 2018, when he slammed Tesla for late deliveries of vehicles for some of his grandchildren. That led him to become a lead investor in the process.
“I still believe in Tesla to this day. I do,” Littleton said.
During questioning, a lawyer for Tesla’s board of directors repeatedly asked whether Littleton had legitimate reasons to believe a buyout was inevitable, but the investor remained firm even while appearing confused at times.
“‘Assured foundation’ was the only thing I cared about,” Littleton testified. “That was such a definite statement.”
Musk’s 2018 tweets drew the attention of securities regulators, who concluded that they were improper and that he was lying. In an establishmentthey forced him to pay $40 million and asked him to resign as president of Tesla.
U.S. District Judge Edward Chen, who is presiding over the trial, ruled that the shareholders’ lawyers cannot mention that agreement in the case.
But Chen already ruled that Musk’s tweet was fake, a conclusion that can be alluded to during the trial without specifically mentioning the judge’s decision. Pollitt seized on this opportunity during his opening statement, informing jurors that they had to assume Musk’s tweet was false, as the judge allowed. Spiro shook his head as he listened.
The outcome of the trial may accept 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 resumed on Wednesday, Porritt told The Associated Press that he hopes to call Musk to the stand when the trial resumes on Friday after two more witnesses testify. If the allotted time runs out on Friday, Musk will likely testify on Monday, Porritt said.
Musk’s leadership of Twitter – where he has blown the staff and alienated users and advertisers – has proven unpopular among Tesla’s current shareholders, who have worried that he has devoted less time to the automaker at a time of intensifying competition.
These concerns contributed to a 65% decline in Tesla shares 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 stock prices from August 7 to 17. , 2018, the period covered in the process.
Tesla’s stock has split twice since then, making the $420 price mentioned in his 2018 tweet worth $28 on an adjusted basis now. Shares closed Wednesday at $128.78, down from the company’s November 2021 peak of $414.50.
After Musk abandoned the idea of a purchase of Tesla, the company overcame a production problem, which resulted in a rapid revolution in car sales that caused its stock to rise and made Musk the richest person of the world until buying Twitter. Musk fell from the first place in the wealth list after a stock market reaction to his management of Twitter.