Elon Musk was found not liable in a class-action securities fraud trial that centered on the Tesla CEO’s now infamous “funding secured” tweet.
The central question in the lawsuit was whether Musk was liable for losses suffered by shareholders after he posted in August 2018 several messages on Twitter that he had secured the funding to take Tesla private. Musk initially tweeted “Am considering taking Tesla private at $420. Funding secured.” Another pair of tweets soon followed: “Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote” and then another stating that he doesn’t have a controlling vote now and “wouldn’t expect any shareholder to have one if we go private.”
Plaintiffs attorneys representing investors argued that these shareholders suffered financially as a result. Musk faced billions of dollars in damages.
After less than two hours of deliberation, a jury announced the verdict in the trial that kicked off three weeks ago in San Francisco. The outcome of the trial sent Tesla shares up about 1.5% in after-hour trading to $189.98.
The trial hinged largely on the language and intent of that tweet. The plaintiffs argued it led ordinary investors to lose money, and Musk’s lawyers argued the tweet was simultaneously true (he really did intend to take Tesla private) and a slip of the hand (“funding secured” was the wrong word choice).
This story is developing …
Elon Musk, Tesla found not liable in ‘funding secured’ tweet lawsuit by Kirsten Korosec originally published on TechCrunch
