New Delhi: A US jury on Friday decided that Tesla CEO Elon Musk and his company were not liable for misleading investors when Musk tweeted in 2018 “funding secured” to take Tesla private, as reported by the news agency Reuters. In August 2018, Musk tweeted, "Am considering taking Tesla private at USD 420. Funding secured."
"Investor support is confirmed. Only reason why this is not certain is that it's contingent on a shareholder vote," he added in the tweet. After the tweet, investors sued Musk, Tesla, and the company board, saying that his statement regarding the embryonic plan to take the electric car company private had devastating financial consequences for them.
The decision has come as a big relief for Musk. The plaintiffs had claimed billions in damage. After the verdict was out, shares of Tesla rose 1.6 percent in after-hours trading. According to Reuters, the jury gave a unanimous verdict roughly two hours after the beginning of deliberations. "We are disappointed with the verdict and are considering next steps," said Nicholas Porritt, a lawyer for the investors, Reuters reported.
Musk, who was not present in court later appreciated the decision made by the jury in a tweet. "Deeply appreciative" of the jury's decision, he said in a tweet. "Thank goodness, the wisdom of the people has prevailed," he said. The company shareholders claimed that Musk misled them when he tweeted in August 2018 that he was considering taking the company private at $420 per share, and had "funding secured," as reported by Reuters.
In his closing arguments, Porritt said Musk is not above the law and should be held liable for the tweets. "This case ultimately is about whether rules that apply to everyone else should also apply to Elon Musk," he said, as quoted by Reuters.
Musk's lawyer Alex Spiro said that the billionaire CEO’s "funding secured" tweet was "technically inaccurate" but that investors only cared that he was considering a buyout, Reuters reported. "The whole case is built on bad word choice," he said. "Who cares about bad word choice?"
"Just because it's a bad tweet doesn't make it fraud," Spiro said during closing arguments, as quoted by Reuters. The shareholders hired an economist who had calculated investor losses as high as $12 billion.