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: Elon Musk tells court Saudi Arabia wanted to take Tesla private, $420 ‘not a joke’

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Tesla Inc. Chief Executive Elon Musk on Monday resumed his place on the witness stand in a federal trial in San Francisco over investor losses allegedly caused by tweets he fired off in 2018, including his “funding secured” tweet.

Musk said that he believed he had an agreement with Saudi Arabia’s investment fund, with more than enough money to take the EV maker private.

“They were unequivocal about moving forward,” Musk told the court.

Musk also mentioned his stake in privately held aerospace company SpaceX, which “alone meant funding was secured.”

The CEO told court that the $420 a share price on the deal “was a coincidence,” and “not a joke,” but instead a roughly 20% premium over Tesla’s stock price at the time.

In certain circles, the number 420 refers to marijuana use.

Tesla stock added to gains as Musk’s testimony got underway, and at last check was up more than 6% and far outperforming the broader equity indexes.

The shares have lost 55% in the past 12 months, compared with losses of around 9% for the S&P 500 index.
SPX,
+1.27%

Musk gave brief testimony Friday before the court adjourned for the day, taking pains to make clear that his tweets are not always taken to the letter. The trial started last week and it is expected to go into February.

“Just because I tweet something, it does not mean people believe it, or act accordingly,” Musk said on Friday to a defense attorney.

The trial revolves around Musk’s tweets from August 2018, including one where he told his millions of Twitter followers he was “considering taking Tesla private at $420” and then added “funding secured.” The plan later fizzled out.

Investor Glen Littleton, the lead plaintiff in the case, alleges he lost money due to the false tweets and is seeking damages.

U.S. District Judge Edward Chen already has ruled that Musk’s tweets about taking Tesla private were not true and that Musk acted with recklessness.

It is still up to jurors to decide, however, if the tweets were material to investors and if the falsehoods caused investor losses.

The CEO and Tesla each were fined $20 million in September 2018 to settle civil charges around the “funding secured” tweets and Musk was stripped of his chairman role at Tesla.

Musk and Tesla agreed to settle the charges against them without admitting to nor denying the SEC’s allegations.

Musk’s bid to end the SEC settlement deal over the Tesla tweets was denied last year.

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