Elon Musk appeared in a San Francisco federal court on Friday to defend tweets he posted to his tens of millions of followers in August 2018.
The tweets said he had “funding secured” to take his electric vehicle company private for $420 per share, and that “investor support” for such a deal was “confirmed.
Tesla’s stock trading initially halted after the tweets, then shares were highly volatile for weeks. Musk later said that he had been in discussions with Saudi Arabia’s sovereign wealth fund and felt sure that funding would come through at his proposed price. A deal never materialized.
The SEC charged Musk and Tesla with civil securities fraud after the tweets. Musk and Tesla each paid $20 million fines to the agency, and struck a revised settlement agreement that required Musk to temporarily relinquish his role as chairman of the board at Tesla.
His 2018 tweets also triggered a shareholder class action lawsuit from Tesla investors. They alleged that Musk’s tweets misled them and said relying on his statements to make trades cost them significant amounts of money.
The shareholders’ trades in question took place during a 10-day period before Musk seemed to admit a take-private deal was not going to happen in 2018.
Musk said under oath on Friday that it’s difficult to link Tesla’s stock price to his tweets.
It’s rare for top executives at publicly traded companies to discuss their stock price because any commentary can influence price movements.