A lawyer for angry Tesla investors told a California courtroom on Wednesday that CEO Elon Musk "lied" about having funding in place to take the company private, costing his clients millions of dollars.
More than four years after Musk fired off tweets saying he
had funding secured to buy the electric car maker at $420 a share, investors
who felt burned by the misleading statements began to make their case in the
San Francisco court.
The tweets in the summer of 2018 sent the Tesla share price
on a rollercoaster ride and Musk was sued by shareholders who say the tycoon
acted recklessly in an effort to squeeze investors who had bet against the
company.
"Elon Musk, Tesla's chair and chief executive,
lied," said attorney Nicholas Porritt, who represents Glen Littleton and
other investors in the automaker.
"And his lies cost regular people like Glen Littleton
to lose millions and millions of dollars," Porritt added in opening
remarks.
Called as the first witness, 71-year-old Littleton told
jurors he was heavily invested in Tesla in 2018 in a way that banked on the
share price climbing to $500 or more.
Littleton testified that he was "pretty shocked"
by Musk's tweet about taking the company private at $420 (roughly Rs. 34,200) a
share because it threatened almost all the money he had invested in Tesla.
"It was going to pretty much wipe me out,"
Littleton said.
Littleton told jurors he scrambled "in a fog of
war" to save what he could of his investments, getting out of most of his
positions at a huge loss.
The fraud trial had opened Tuesday with the selection of a
nine-person jury, and is expected to last three weeks. Musk is scheduled to
take the stand, possibly as early as Friday.
Musk denies he was being deceitful and his lawyers are
expected to call on witnesses to vouch for his plans at the time, including
testimony from Musk's friend and fellow billionaire Larry Ellison.
'Not fraud'
The case revolves around a pair of tweets in which Musk said
"funding secured" for a project to buy out the publicly-traded
electric automaker, then in a second tweet added that "investor support is
confirmed."
Porritt told jurors that Musk had selected the $420 share
price in the tweet "as a joke" and that the funding to take Tesla
private was never locked in, nor credibly pursued.
In his own opening remarks, Musk attorney Alex Spiro said
that even though the tweets may have been a "reckless choice of
words", they were "not fraud, not even close."
"What Mr. Musk was communicating in those tweets was
that Mr. Musk was serious about taking Tesla private," Spiro told jurors,
adding that anything more detailed or official "would have had the same
effect on the market."
The trial comes at a sensitive time for Musk, who has
dominated the headlines in recent months for his chaotic takeover of Twitter
where the entrepreneur laid off more than half of the 7,500 employees and
downsized content moderation.
Tesla's share price has plummeted with investors accusing
Musk of spending too much time on Twitter when the car company faces new
challenges, including a slumping economy and the arrival of new rivals on the
electric car market.
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