Musk Testifies Saudi-Backed Offer To Take Tesla Private At $420 Per Share Was No Joke

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Tesla CEO Elon Musk believed he’d earned the backing of Saudi Arabia’s Public Investment Fund in 2018 when he tweeted funding to take the electric vehicle maker private was “secured,” the billionaire insisted in court Monday, as the U.S.’ wealthiest man’s court testimony defending his oft-controversial behavior on Twitter continued into its second day.

Key Facts

The Saudi sovereign wealth fund “unequivocally wanted to take Tesla private,” Musk said on the stand as part of a civil lawsuit accusing Musk of securities fraud, according to Bloomberg (the court’s live audio feed was not working in the beginning portion of his testimony).

The fund’s head Yasir Al-Rumayyan said he met with the country’s de-facto leader Crown Prince Mohammed bin Salman, according to Musk, who said he “took that to mean it was a done deal” and added his shares in the private aeronautics firm SpaceX would also fund a potential deal.

Musk explained Monday he sent the tweet in question after learning about an upcoming Financial Times article on the Saudi fund building a multibillion-dollar stake in Tesla.

Musk called the $420-per-share price he claimed to secure for Tesla a “coincidence” with no relationship to 420’s typical association with marijuana, but noted with a chuckle the number represented good “karma.”

The “$420 price was not a joke,” Musk testified, adding he was unsure whether or not his then-partner, the musician Grimes, was amused at the share price, as the Securities and Exchange Commission claimed in 2018.

Key Background

Musk’s infamous “Am considering taking Tesla private at $420. Funding secured” tweet, which indicated a more than 20% premium on Tesla’s share price at the time, landed Musk and Tesla $20 million respective penalties from the SEC. The billionaire had not actually secured funding to take the company private, the SEC later said, and his false claims caused the company’s shares to rise 6% following the post. The lawsuit, brought forward by a class of retail Tesla investors including the lead plaintiff, Missouri-based investor Glen Littleton, seeks billions in damages and alleges Musk intentionally moved the company’s stock price by providing false or misleading information about the supposed deal to take Tesla private. Musk testified for about 30 minutes Friday as part of the shareholder suit, asserting his Twitter activity does not directly impact Tesla share prices and ranting against the Tesla short sellers that added additional pressure to the company at the time of the tweet. The Saudi Public Investment Fund has more than $500 billion of assets under management, according to its latest estimates, including billions of dollars worth of shares of U.S. companies including Amazon and Google, though the fun is perhaps best-known in the U.S. for bankrolling the upstart PGA Tour competitor LIV Golf.

Surprising Fact

Musk famously smoked marijuana live on the Joe Rogan Experience podcast in September 2018, a month after the $420 funding post, and tweeted out an image of him doing so in April 2022 shortly before he agreed to buy Twitter for $44 billion.

Crucial Quote

“I had trouble sleeping last night so unfortunately I am not at my best,” Musk said at the stand Monday, according to the Washington Post.

Tangent

Musk tacked on $6.3 billion to his fortune Monday as Tesla shares gained 6.5%, hitting their highest level since mid-December. Musk is worth $159.3 billion according to our latest estimates, about $40 billion more than the next-wealthiest American, Amazon founder Jeff Bezos. Musk’s firm will report quarterly earnings Wednesday.

Further Reading

Musk Calls Short Selling ‘Evil’ In Testimony Defending 2018 Tweet To Take Tesla Private (Forbes)