Elon Musk Says Saudi Fund Wanted to Take Tesla Private
Elon Musk testified on Monday in federal court that Saudi Arabia’s sovereign wealth fund had “unequivocally wanted to take Tesla private,” in a trial that centers on whether Mr. Musk’s statements in 2018 about taking the automaker off the stock market caused investors to lose billions of dollars.
The judge overseeing the case, in San Francisco, had already ruled that some of Mr. Musk’s statements about taking the company private were untrue — including his claim that he had secured financing for the transaction.
The testimony about the Saudi fund, the Public Investment Fund, came in response to questions by a plaintiff’s lawyer who pressed Mr. Musk, Tesla’s chief executive, for more details about the plan to take the company private. Mr. Musk said that officials from the Saudi fund had not signed documents committing to a deal and that they had not discussed how much they would invest in the deal.
“The exact amount would not be knowable without knowing who else would participate,” he said. But he added that he believed “if they say they’re going to do something, they do.”
Removing a public company from the stock exchange can be expensive and difficult. The people or investment firms seeking to take a business private have to come up with the money to buy all or most of its stock.
The Saudi fund, which had amassed a 5 percent stake in Tesla before Mr. Musk announced his plans, would have been an important part of any deal. Mr. Musk had long claimed the Saudi investors were committed to the transaction, and communications contained in court filings showed that Mr. Musk criticized Saudi officials after news reports suggested that they were lukewarm about a deal.
Mr. Musk and Tesla’s legal team unsuccessfully tried to compel the fund’s employees to testify in the trial. This month, the fund’s lawyers called the subpoenas “legally deficient” and “frankly, frivolous.” A spokesman for the fund did not immediately respond to a request for comment on Monday.
On Aug. 7, 2018, Mr. Musk wrote on Twitter: “Am considering taking Tesla private at $420. Funding secured.” Mr. Musk then wrote: “Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote.” Tesla’s share price jumped after Mr. Musk published those posts but fell as the proposal fizzled out.
When asked whether he had priced Tesla at $420 per share because it would be “a joke your girlfriend would enjoy,” Mr. Musk said, “There is some karma around $420, though I should question whether that is good or bad karma at this point.” Mr. Musk then added that he picked $420 because it was about 20 percent more than Tesla’s share price at the time.
Mr. Musk, wearing a dark suit and black surgical mask, entered the courtroom and walked straight to the witness stand. He watched the jurors as they walked in and nodded to them.
Lawyers for the investors have argued that people made decisions about their investments in Tesla because Mr. Musk said he had obtained the funding needed to take Tesla private. But lawyers for Mr. Musk and Tesla have said it is possible investors made decisions based on Mr. Musk’s statement that he was considering taking Tesla private — a statement his lawyers claim was true.
Legal experts have said that most companies and chief executives would probably have settled a case like this. But Mr. Musk has often shown a willingness to let lawsuits filed against him and Tesla go to trial.
While he was on the witness stand on Friday, Mr. Musk acknowledged that his Twitter account provided important information about Tesla and that it had to follow rules from the Securities and Exchange Commission. But he denied that his social media posts were responsible for swings in Tesla’s share price. He also said he couldn’t be as comprehensive on Twitter as Tesla could be in S.E.C. filings and news releases.
Mr. Musk also said that his friends, as well as Tesla’s executives and investors, had suggested that he take a break from Twitter before he posted about taking Tesla private.
In 2018, Mr. Musk and Tesla settled a separate lawsuit with the S.E.C. about his proposal to take Tesla private. They paid fines to the S.E.C., and Mr. Musk agreed to resign as Tesla’s chairman and to allow a lawyer to review certain statements about the company before posting them on social media.
The trial started three months after Mr. Musk acquired Twitter. Since then, he has fired most of its employees, changed its content rules and allowed previously banned or suspended users back onto the platform.
