Attorney Alex Spiro told jurors that Musk hastily sent the tweet after he read an article which revealed that Saudi Arabia had taken a $2 billion stake in Tesla. He said Musk had just met with Saudi officials and sent the tweet out of concern that details of the talks would leak.
The remarks marked the opening salvo in a trial pitting Musk against a class of Tesla shareholders who say his tweet, which later proved to be inaccurate, cost them billions of dollars when shares tanked. The shareholders are seeking unspecified damages.
Musk’s attorneys argued that the tweet was not meant to indicate a formal deal had been finalized and represented his intent rather than a certainty.
“The market always understood that this was a consideration,” Spiro said. “Considerations aren’t certain. Everybody knows that.”
Attorneys for the Tesla shareholders accused Musk of lying to the company’s investors and misleading them into placing bets on auto maker based on faulty information.
Jurors were told that Tesla’s board of directors had not received any notice of a funding agreement at the time of Musk’s tweet.
“When the CEO of a public company like Tesla lies about his company and hurts investors, it’s critical that he is held accountable for that harm that he causes,” plaintiffs’ attorney Nicholas Porritt said in his opening statement.
One shareholder, Glen Littleton, testified that he sold his shares in Tesla after reading Musk’s tweet due to concerns that he would lose them should the company go private.
“I was in a state of shock during this time,” Littleton said, according to the FT. “‘Funding secured’ is so definite to me. That was the primary driver.”
Musk is expected to testify at some point during the trial. Jurors will assess whether Musk’s tweet and other actions resulted in financial harm for Tesla shareholders.
The Tesla CEO was dealt an early setback last year when the case’s presiding judge, Edward Chen, ruled that his “funding secured” tweet was “false and misleading” and that Musk had acted “recklessly given his clear knowledge of the discussions.”
Chen also said there was “nothing concrete” to support Musk’s claims of a formal agreement with Saudi Arabia’s Public Investment Fund at the time of the tweet.