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Elon Musk is back on the stand in trial over controversial ‘funding secured’ tweet

By Matt McFarland, CNN Business

Tesla CEO Elon Musk returned to the witness stand for a third day in a California court room Tuesday, as he testified in a class-action lawsuit over his controversial “funding secured” tweet from 2018. It will likely be Musk’s final day of testimony.

Musk, Tesla and company directors are facing a shareholder lawsuit over the tweet, in which the CEO said that he was thinking about taking Tesla private for $420 per share and had “funding secured.” Those final two words led to Musk having to forfeit his position as Tesla’s executive chairman and paying millions in legal fees and fines.

Musk’s “funding secured” tweet previously prompted a civil suit by the Securities and Exchange Commission, the federal agency that protects investors. A settlement was reached in which Musk and Tesla each paid $20 million in fines and Musk gave up his chairman title. Musk was also supposed to have some his tweets reviewed before publishing them, according to the agreement.

Musk testified that he talked to executives of the Saudi sovereign wealth fund about the money he would need to make Tesla a private company. But funding was anything but “secured.” Some shareholders who took action based on his tweet allege that they lost money as a result. A nine-person jury must decide if Musk bears any responsibility for losses they incurred.

Musk said Tuesday that he’s never had trouble raising money in his career, despite not securing funding for any bid to take Tesla private.

“It’s not a problem for me to raise money. I’ve done a very good job for investors,” Musk said. “If you do a good job for investors they give you money.”

He also said his tweet was not meant to say that Tesla would certainly be taken private, but that he felt he had the funding necessary if shareholders chose to do so.

“I had no ill motive. I thought I was doing the right thing to make sure that shareholders were aware of the take private proposal,” Musk said.

Musk testified Monday that he believed he had a deal in place with the Saudi fund, which claims to have $620 billion in assets under management as of early 2022.

The lead plaintiff, Glen Littleton, testified last week that he lost more than 75% of his investments following Musk’s “funding secured” tweet.

Plaintiff attorney Nicholas Porritt asked Musk Tuesday if he felt any regret for harm caused to people who lost money, like the plaintiffs.

“I certainly never want an investor to lose money,” Musk said. “If he did lose money on the base of that tweet, obviously I would be sad about that.”

Musk has argued during the trial that his tweets do not cause Tesla’s stock price to move higher or lower. He pointed to a time in May of 2020 when he tweeted that “Tesla stock price is too high.” The stock price dropped the day of his tweet but recovered and closed the year higher than it had opened.

The trial is expected to run through Feb. 3.

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Article Topic Follows: CNN - Business/Consumer

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