SAN FRANCISCO (Reuters) – Elon Musk Tesla Inc (TSLA.O) Investors don’t always react to his Twitter messages as he expects, the CEO said on Friday, defending himself in a fraud trial over his 2018 tweet that he secured funding to take the electric car maker private.
Musk’s testimony began with questions about his use of Twitter, the social media platform he bought in October. He called it the most democratic way to communicate, but said his tweets don’t always affect Tesla’s stock the way he expected.
“Just because I tweet something doesn’t mean people believe it or will act accordingly,” Musk told the jury in San Francisco federal court.
Musk testified for less than 30 minutes before court adjourned until Monday and was not asked about his 2018 tweet that he was considering taking Tesla private and had “got funded.”
He is expected to address why he insisted he had the backing of the Saudi investor to take Tesla private, which never happened, and whether he knowingly made a materially misleading statement through his tweet.
The case is a rare class securities trial and prosecutors have already cleared significant legal hurdles, with Judge Edward Chen ruling last year that Musk’s funding job was dishonest and reckless.
Shareholders alleged that Musk lied when he sent the tweet, costing investors millions.
Musk, dressed in a dark suit over a white T-shirt, spoke softly and at times in a slurred manner, in contrast to his combat testimony in some of the previous trials.
Musk described the company’s difficulties at the time he sent the “financing secured” tweet, including short-sellers’ bets that the stock would drop.
“A bunch of Wall Street sharks wanted Tesla dead, and that’s too bad,” he said, describing short sellers who profit when the stock price drops.
He said short sellers were planting false stories, and said the practice should be illegal.
Tesla shares closed up about 5%, at $133.42.
Earlier Friday, Tesla investor Timothy Fries told a jury he lost $5,000 buying Tesla stock after Musk sent the tweet, sparking volatile swings in Tesla stock.
Fries said that for him “secured funding” meant that “there was some scrutiny, some critical review of those sources of funding.”
Alex Spiro, Musk’s attorney, told the jury in his opening statement on Wednesday that Musk believes he has secured funding from Saudi backers and is taking steps to complete the deal. Fearing media leaks, Musk tried to protect the “everyday contributor” by sending a tweet containing “technical errors,” Spiro said.
Harvard Law School professor Gohan Subramanian told the jury that Musk’s behavior in 2018 was “unprecedented” and “incoherent” in terms of structuring a corporate deal because he announced his intent without proper financial or legal analysis.
A jury of six men and three women will decide whether the tweet artificially inflated Tesla’s share price by increasing the financing status of the deal, and if so, by how much.
Among the defendants are current and former Tesla executives, who Spiro said had “pure” motives in their response to Musk’s plan.
Additional reporting by Tom Hales in Wilmington, Del. and Judy Godoy in San Francisco; Editing by Noelene Walder, Peter Henderson, Matthew Lewis, Daniel Wallis, and David Gregorio
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