Et is a triumph across the board for Elon Musk: A jury in a San Francisco court on Friday unanimously dismissed a lawsuit in which shareholders sought damages from the CEO of the electric car manufacturer Tesla over infamous Twitter posts. It was apparently a clear decision, because the jury needed less than two hours for it. The closing arguments of the two sides were not held until Friday morning, after which the jury retired to deliberate.
Musk tweeted after the decision, “Thank God the wisdom of the people prevailed.” He added that he deeply appreciated the jury finding him innocent. It is still unclear whether the plaintiffs intend to pursue an appeal. Her lawyer said he was disappointed with the outcome of the case and was considering next steps.
Tweets caused price swings
The trial involved a 2018 tweet in which Musk announced a possible Tesla delisting. He wrote: “Considering delisting Tesla for $420. Funding secured.” He later added, “Investor support confirmed.” But it soon became apparent that funding for the venture wasn’t as secure as Musk suggested. The plan for a delisting was quickly abandoned. The back and forth caused significant price swings in Tesla shares.
The process took three weeks. It stemmed from a lawsuit filed by a shareholder who claimed the price action had cost him $3.5 million. However, the legal dispute took the form of a class action lawsuit and represented a whole group of potentially injured shareholders, so Musk could have been awarded high damages. In addition to Musk himself, the lawsuit was also directed against Tesla. The fact that both sides decided to go to court was rather unusual. Such legal disputes with shareholders often end in out-of-court settlements.
The shareholders’ lawyers have accused Musk of lying with his tweet. Defense attorneys countered that there was no fraud involved, that Musk merely “used the wrong words in a hurry”. Musk, who now also owns Twitter, was on the witness stand himself for several days. He tried to downplay the weight of his tweets. “Just because I tweet something doesn’t mean people believe it or act accordingly.” There is no “causal relationship” between his statements on the platform and Tesla’s share price. He went on to say that at the time he was sure of the support of the Saudi sovereign wealth fund PIF in order to be able to finance an IPO.
Judge previously ruled against Musk
The starting position for the shareholders was actually not bad, because last year the responsible judge in San Francisco had already ruled against Musk in this matter. He ruled the tweets were wrong. The decision on the shareholder lawsuit was now not with him, but with a jury.
The controversial tweets have brought Musk other legal disputes. In 2018, the SEC sued him, alleging securities fraud. At the time, Musk felt compelled to agree to a settlement. Both he personally and Tesla himself paid a $20 million fine.