Elon Musk won a major reprieve on Friday when a California jury exonerated him in the case relating to a 2018 tweet in which he talked about taking Tesla private. Tesla shareholders had accused Musk of causing huge financial losses to them following the tweet. A class action shareholder suit sought monetary damages from Musk, Tesla and the directors of the electric caar company.
In a unanimous verdict, the jury ruled that the plaintiffs could not prove any of their claims against Musk. "Thank goodness, the wisdom of the people has prevailed ... I am deeply appreciative of the jury's unanimous finding," Musk tweeted.
The whole case emanated from Musk's tweet in 2018 in which he said funding was secured for taking Tesla private at $420 a share. Investors have filed a class action lawsuit against the Tesla founder, accusing him of committing securities fraud with the tweet.
The Tesla share price had surged as much as 11 percent after Musk tweeted the plan to take it private by offering $420 per share. However, the share prices backed down when it became clear that the deal was not going to take place, resulting in investor losses amounting to millions of dollars.
Losses for Shareholders
According to one investor, Glen Littleton, as much as 75 percent of the value of his investment in Tesla was lost following the tweet. "I wanted to ensure my livelihood. This represented a threat to my livelihood," said Littleton, who was the lead plaintiff in the shareholder lawsuit.
However, Musk defended the tweet, saying it was genuine. He revealed during the trial that there was indeed a plan under which Tesla would have been taken private. He said the Saudi Arabian sovereign wealth fund was angling to take Tesla private. The Saudi Arabian Public Investment Fund was 'unequivocal about moving forward', he said.
"I thought it would be good for the shareholders to take Tesla private ... We were under an unprecedented attack from short sellers." he added. He then explained that the Saudi sovereign wealth fund Governor later 'backpedalled' on the commitment. Citing text messages with the wealth fund chief, Musk said Yasir Al-Rumayyan was later engaged in 'ass covering'. The plan was eventually dropped due to what he says as a lack of support from some investors and as he wanted to avoid the lengthy process the privatizing process would have taken.