Elon Musk defends his previous tweets in securities fraud trial in San Francisco

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Alex Spiro, attorney to Elon Musk, center, departs court in San Francisco, California, US, on Tuesday, Jan. 17, 2023.

Benjamin Fanjoy | Bloomberg | Getty Images

Tesla CEO 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 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 action lawsuit from 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.

“There have been many cases where I thought that if I were to tweet something, the stock price would go down,” Musk said. “For example, at one point I tweeted that I thought that, in my opinion, the stock price was too high…and it went went higher, which was, which is, you know, counterintuitive.”

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surged about 10% during trading that day. Short sellers face enormous losses when shares in a given company climb higher.

Some of the plaintiffs in the trial that’s underway claim that Musk’s “funding secured” tweets were intended to put upward price pressure on Tesla’s stock driving a so-called “short squeeze.”

Musk’s testimony is not yet complete and the court plans to hear from him again on Monday.

WATCH: Musk testifies over tweets