Elon Musk was unanimously cleared of wrongdoing by a San Francisco federal jury Friday hearing a case alleging Musk fraud. “Am considering taking Tesla private at $420,” Mr. Musk declared in an August 7, 2018 Twitter post. “Funding secured.” Some shareholders sued the company founder and then-CEO after he posted a subsequent post saying Tesla would remain a publicly traded entity.
Had the shareholders prevailed in their contention that the Musk tweet was fraudulent, they could have collected billions in penalties.
A federal jury in San Francisco rejected demands that the 51-year-old billionaire should have to pay billions of dollars in damages over the tweet.
Musk was present during the trial and took to the witness stand where he said that he had come to a handshake agreement at the time with Saudi Arabia’s Public Investment Fund to take the company private. He said that the Saudis later backed out of the deal.
“I had no ill motive,” Musk said. “My intent was to do the right thing for all shareholders.”
Adam Pritchard, a professor at University of Michigan Law School, said that the case is not likely to become precedent that changes how other executives exercise free speech online.
“Nobody does this — only Elon does this,” Pritchard said while complaining about Musk’s online speech. “He’s incorrigible. I don’t think his behavior can be reformed. There’s just too long of a track record of too much mischief.”
Following the verdict, Musk tweeted his appreciation for the jury: “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.”
Musk has taken a public company private before. When the billionaire purchased Twitter in late 2022, he took the company private, removing it from the stock exchange. Erik Gordon, Professor of Business at the University of Michigan, noted in a piece for The Conversation that public companies don’t frequently go private, but it does happen.
Some benefits of going private — from the standpoint of someone like Musk — might be that Twitter would no longer have to file reports with the Securities and Exchange Commission (SEC), and would have “few shareholders — sometimes just one,” among other pluses.
