Attorneys are poised to present opening statements Wednesday in a federal trial related to
Elon Musk’s
2018 tweets floating the possibility of taking
Tesla Inc.
TSLA 7.43%
private.
The class-action case stems from an Aug. 7, 2018, tweet in which Mr. Musk, then Tesla’s chairman and chief executive, said, “Am considering taking Tesla private at $420. Funding secured.” He later added, “Investor support is confirmed.”
The lead plaintiff, investor
Glen Littleton,
sued Mr. Musk, Tesla and members of Tesla’s board at the time, alleging the tweets were false and spurred swings in the prices for Tesla stock, options and bonds, costing investors billions of dollars. He is seeking damages for those losses. Tesla’s stock closed up 11% the day Mr. Musk tweeted about potentially taking Tesla private, then gave back those gains and fell further as questions emerged about the deal.
Mr. Musk, who could testify as early as this week, has said in court filings that he believed he had support from Saudi Arabia’s sovereign-wealth fund to take Tesla private. A lawyer for Tesla, Mr. Musk and the board members didn’t respond to a request for comment. Neither did a lawyer for the lead plaintiff.
U.S. District Judge
Edward Chen,
who is overseeing the San Francisco trial in federal court, swore in a nine-person jury Tuesday.
During jury selection, attorneys and Judge Chen zeroed in on prospective jurors’ personal views of Mr. Musk and his takeover of Twitter Inc., as well as the extent to which they could set those views aside. Attorneys for Mr. Musk and Tesla had asked Judge Chen to move the case to Texas on the grounds that Bay Area jurors had been exposed to excessive, negative publicity about Mr. Musk. Judge Chen late last week rejected that request.
Last year, the judge ruled that Mr. Musk’s tweets about potentially taking the company private weren’t true and that he acted recklessly in making them. Jurors are being asked to decide, among other issues, whether the tweets were material to investors.
Mr. Musk last took the stand two months ago in a Delaware trial over his pay package at Tesla. In 2021, he appeared before Delaware’s business-law court to defend Tesla’s roughly $2.1 billion takeover of home-solar company SolarCity Corp. in 2016. A judge sided with Mr. Musk, finding that Tesla hadn’t overpaid, as a group of Tesla shareholders alleged. That decision has been appealed.
Write to Rebecca Elliott at [email protected] and Meghan Bobrowsky at [email protected]
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