Elon Musk avoided a multibillion-dollar bullet on Friday when a jury concluded that he was not responsible for any damages Tesla investors incurred after Musk tweeted in 2018 that he would take the electric car manufacturer private.
The $72 billion acquisition never took place, and shareholders then accused Musk of deceiving them, according to the BBC.
The New York Times stated that two postings made by Musk in August 2018 caused Tesla’s stock to jump.
In one, Musk wrote, “Am considering taking Tesla private at $420. Funding secured.” He followed that with, “Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote.”
Three weeks later, the stock plunged as a result of the failed transaction.
According to the BBC, the San Francisco jury debated for less than two hours before reading their decision.
If he had lost the case, Musk might have been liable for billions of dollars in damages.
Judge Edward Chen, who was presiding over the civil claim, concluded that the phrases “funding secured” in the first post and Musk’s whole second post were false and that Musk acted irresponsibly in posting them.
Adam C. Pritchard, a law professor at the University of Michigan, stated that Musk’s victory defied the odds in light of this context.
“I thought he was crazy to try his chances at trial, given the stakes involved. … You’re fighting with one hand behind your back in that situation — and yet he won,” he said.
“Thank goodness, the wisdom of the people has prevailed!” Musk tweeted.
Thank goodness, the wisdom of the people has prevailed!
I am deeply appreciative of the jury’s unanimous finding of innocence in the Tesla 420 take-private case.
— Elon Musk (@elonmusk) February 3, 2023
Nicholas Porritt, the plaintiffs’ attorney, was less optimistic.
“We are disappointed with the verdict and considering next steps,” he said.
As jurors responded to queries from attorneys for the unsuccessful plaintiffs following the judgment, one juror stated that their case had no connection.
“There was nothing there to give me an ‘aha’ moment,” the juror said. “Elon Musk is a guy who could sneeze and the stock market could react.”
The investors argued that Tesla was not even close to going private.
“This case is about whether rules that apply to everybody else should apply to Elon Musk,” Porritt said during the trial.
Musk’s legal team asserted that the truth was a valid defense, as Musk was considering taking the firm private.
Musk stated that he anticipated investment from a Saudi Arabian fund, but it never materialized.
Musk and Tesla finally paid the Securities and Exchange Commission $40 million in fines for the tweets regarding the plan to take Tesla private. This settlement resulted in a condition that Musk is attempting to eliminate, in which a lawyer must examine some Tesla-related remarks before Musk publishes them.