Musk argued in his 2018 tweets that taking Tesla private could save a lot of headaches for the company’s management.
Elon Musk through his legal team had a rough time in a San Francisco federal court defending his 2018 tweets intending to take Tesla Inc (NASDAQ: TSLA) private at $420 a share.
Musk’s Tweets on Tesla
Shareholders are suing the Tesla CEO under federal securities law over his 2018 tweets, which they allege were false and misleading statements that caused them financial harm and losses. Notably, the court has already deemed Musk’s tweets to be “untrue.” As such, Tesla investors intend to hold Musk and the company’s board members liable for the financial damages.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
Musk argued in his 2018 tweets that taking Tesla private saves a lot of headaches for the company’s management. As such, the tech billionaire reportedly had secured $60 billion from Saudi Arabia investors, who were a crucial part of the $44 billion Twitter acquisition deal.
While Musk has been using Twitter to make official statements some Ty even before filing with the SEC, his legal team argued the purpose is to avoid news leakage.
“He decided in that rushed moment, imperfect or not, that disclosure was a better course,” Alex Spiro, Musk’s attorney, told jurors in his opening argument in court. “He didn’t want there to be a leak.”
Notably, the affected Tesla shareholders want Musk and the board members held accountable and repay them billions of dollars.
“In order for markets to operate normally and fairly, it’s critical that he is held, and the company is held, liable,” Tesla shareholders’ attorney Nicholas Porritt said.
The tech billionaire is expected to take the stand when the trial resumes on Friday and after the jury hears from two other witnesses.
Tesla and the Market Outlook
Tesla has been a huge success in the electric vehicle industry both in America and overseas. After rallying exponentially from 2010 to 2021, the Tesla stock market has dropped over 60 percent in the last twelve months. According to market data provided by MarketWatch, TSLA shares are down approximately 42 percent in the last three months to trade around $126.70 on Wednesday’s after hours trading session.
In the past year, Tesla has seen its market capitalization declines from about $1.2 trillion to the current $415.21 billion. Nonetheless, market analysts are still bullish on Tesla shares, with 45 ratings giving an average target price of $216.13 and an average recommendation of Overweight.
During the 2022 fourth quarter earnings results that were released at the beginning of this year, the company produced over 439,000 vehicles and delivered over 405,000 vehicles. In 2022, vehicle deliveries grew 40 percent YoY to 1.31 million while production grew 47 percent YoY to 1.37 million.
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