Elon Musk is involved in a fraud trial involving Twitter and Tesla, with jury selection beginning Tuesday, January 17 in San Francisco.
Recall, if you like, the viral moment on August 7, 2018, when Musk tweeted that he was considering privatizing Tesla and secured the buyout funding at $420 a share.
Here is that tweet.
Musk was originally thought to be “epic”, using the weed number to get attention. But a week later, when the buyback still hadn’t happened, the SEC launched an investigation.
The electric car company’s share price has fluctuated wildly over the course of this week, with new details emerging, largely due to Musk’s lack of secured funding. A federal judge later ruled that Musk’s tweets were misleading and that he was “recklessly making statements knowing they were false.”
Musk later negotiated a $40 million split between himself and Tesla with the SEC and ruled that Musk could not be Tesla’s chairman for three years.
Now, the shareholder class-action lawsuit is focused on the 10-day period that began August 7, 2018, during which Tesla shares fluctuated $14 billion. A federal court has already decided he is misleading, and this trial will determine if Musk was reckless by actually hitting the blue “TWEET” button.
Since then, Tesla shares have skyrocketed, followed by a sharp drop, losing 65% of their value over the past year, which may be due in part to Musk’s controversial turn as CEO of Twitter. Tesla shareholders large and small have expressed dissatisfaction with Musk’s excessive focus on Twitter since the company’s purchase.
Last week, Musk’s lawyers tried unsuccessfully to move the trial from California to Texas, writing, “We don’t think we can get a fair trial in this county, period, period.” District Court Judge Edward Chen denied the motion, noting that the lawsuit had nothing to do with Texas because it was brought while Tesla was still headquartered in California.
