Elon Musk Found Not Liable In Trial Over Tesla Privatization Tweet

Topline

Tesla CEO Elon Musk was found not liable Friday of defrauding a group of Tesla investors who claimed to lose billions of dollars as a result of a 2018 tweet that suggested he was taking Tesla private, according to multiple reports, following a high-profile trial where Musk took the stand to defend himself.

Tesla CEO Elon Musk leaves the Phillip Burton Federal Building on January 24, 2023 in San Francisco. … [+] (Photo by Justin Sullivan/Getty Images)

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Key Facts

The August 7, 2018 tweet that prompted the lawsuit said: “Am considering taking Tesla private at $420. Funding secured.”

The investors argued Musk’s tweet was insincere and resulted in them losing money since Tesla’s stock quickly rose following the tweet before dropping when it became clear the company was not becoming private.

Musk testified last month he thought he was “doing the right thing” by sending the tweet, claiming he wanted to alert all investors that he believed a buyout deal from the Saudi Arabian sovereign wealth fund was certain, even though no agreement had been signed.

Crucial Quote

“Just because I tweet something does not mean people believe it or will act accordingly,” Musk testified when he took the stand during the three-week trial in San Francisco.

Big Number

$20 million. That’s how much Musk paid the Securities and Exchange Commission in a 2018 settlement over the tweet, after the SEC sued him for securities fraud. Musk has repeatedly denied wrongdoing and loathed agreeing to the settlement because he thought it made him look guilty.

Key Background

The verdict is a major victory for Musk, who has spent years pushing back on claims he manipulated the market. The 2018 SEC settlement also resulted in significant structural changes at Tesla, including Musk’s removal as chairman of the company’s board and the appointment of two independent directors to monitor Musk’s relations with investors.

Forbes Valuation

We estimate Musk to be worth $184.2 billion, making him the second-richest person in the world.