Elon Musk speaks near a Falcon 9 rocket during his announcement that Japanese billionaire Yusaku Maezawa will be the first private passenger to fly around the moon aboard the SpaceX BFR launch vehicle.
DAVID MCNEW | AFP | Getty Images
Elon MuskТ said Monday in a San Francisco federal court that he could have sold SpaceX stock to acquire it Tesla private in 2018. He was and still is the CEO and largest shareholder of both companies.
Musk is being sued by Tesla shareholders over a series of tweets he wrote in August 2018 saying he had “secured funding” to take the automaker private for $420 a share and “supporting the… Investors” for such a deal was “confirmed”. Trading in Tesla halted following his tweets, and the stock price remained volatile for weeks.
The certified class action lawsuit’s shareholders allege that Musk’s tweets were reckless and false, and that it cost them significant amounts of money to rely on his testimony to make investment decisions.
Musk would later claimthat he had a verbal commitment from the sovereign wealth fund of Saudi Arabia and was certain that funding would be provided at his proposed price on a handshake basis. However, the deal never materialized.
On his second day on the witness stand Monday, Musk claimed another reason he said he “secured funding” for a deal in 2018 was so he could have sold shares in SpaceX, a US defense and satellite company -Internet company he also runs to fund the transaction.
Musk said under oath, “SpaceX stock alone represented self-funding. It’s not like I want to sell SpaceX stock, but I could have, and if you look at the Twitter transaction – I did. I sold Tesla stock to complete the Twitter transaction. And I would have done the same here.” Â
Musk didn’t say how many shares in his reusable rocket maker he could have sold, to whom, and at what price to fund the Tesla buyout.
In April 2018, SpaceX said in a financial records with the SEC that it had raised approximately $214 million in a funding round in which it was seeking more than $500 million in equity funding.
A shareholders’ attorney, Nicholas L. Porritt of Levi & Korsinsky, asked Musk’s CEO if his proposed price for Tesla shares was a joke because 420 is a reference to cannabis in pop culture.
Musk insisted this was coincidence. He said, “I think there’s some karma around ‘420’… I should be wondering if that’s good or bad karma at that point.”
This isn’t the first lawsuit Musk has faced over his tweets. The SEC charged Musk and Tesla with civil securities fraud shortly after his dispatch, and they paid separate fines of $20 million to the federal agency to settle the charges. They later signed a revised consent agreement that required Musk to temporarily step down from his role as Tesla CEO and to have tweets containing material business information about Tesla reviewed by a securities attorney before posting them.
Musk recently became CEO of social media company Twitter after overseeing a leveraged $44 billion takeover of the company in October 2022. Saudi Prince Alwaleed bin Talal bin Abdulaziz is the second largest shareholder of the social media company after Musk. Last November, Sen. Chris Murphy, D.-Conn, sent a letter to the Committee on Foreign Investments in the United States request verification funding the Musk-Twitter deal.
