Tesla CEO Elon Musk, officially history’s biggest loser, returned to the stand for a second day Monday in a lawsuit brought by shareholders over a 2018 tweet in which he stated that he was thinking about taking Tesla private for $420 a share, boasting “Funding secured,” CNN reports.
According to Musk, although 420 is popular stoner slang for that time of day when everyone should relax with a joint, some bong-hits, or edibles, his tweet referred to the fact that he had indeed discussed taking Tesla private through a Saudi sovereign wealth fund, and that although the funding had yet actually been secured, he thought he had a legit deal in place. Sadly for Musk, the tweet cost him $20 million in fines and he was forced to step down as Tesla’s executive chairman.
Throughout his testimony on Monday, however, the SpaceX boss and Twitter Commander repeatedly claimed that he believed the deal was set to move forward.
“My understanding was that they would proceed with the deal,” Musk said. Musk further testified that the head of the $620 billion Saudi fund had “been unequivocal in his support for taking Tesla private when we met” but later “appeared to be backpedaling.”
Musk claimed the Saudi fund had agreed to buy five percent of Tesla with a handshake deal, arguing that it was reasonable to believe that deal was cinched. Musk also said he was concerned about the press leaking details of the agreement, so tweeted out the information to ensure that “all investors would be on equal footing.”
According to Musk, the $420 stock price was no crude jape, but a 20 percent premium on the stock price at the time.
“420 price was not a joke,” he said. “There is some karma around 420, although I should question if that is good or bad karma at this point.” This hardly explains why he offered to take Twitter for $54.20 a share in April. And while it’s unclear just how much of a “head” Musk is, he famously got high after some gentle nudging by cool guy Joe Rogan.
Lead plaintiff Glen Littleton found Musk’s assertions dubious, testifying that he had lost 75 percent of his investment following the Tesla chief’s “Funding Secured” tweet.
An expert witness for the plaintiff, Harvard Law professor Guhan Subramaniam, argued that Musk’s actions were an egregious departure from sound corporate governance. Subramanian explained that, typically, when a company goes private, the process is thorough and controlled. He later highlighted that a special committee is usually formed, and advisers and boards of directors are consulted for months before the announcement, which was different from Tesla.
“To have no guardrails is very concerning,” Subramanian said of Musk and his tweet.
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