The billionaire and his electric-car company may soon be headed to trial in a fight with shareholders who allege the Twitter post cost them billions of dollars in losses.
To fend off allegations that the missive was fraudulent, Musk repeated in a
“It seems to me it’s not factually very complicated,” U.S. District Judge
Parsing Musk’s intent behind the Twitter post is at the heart of a dispute about whether the statement was “indisputably false,” as the shareholders argue -- or, as his lawyers say, it was “entirely truthful.”
What Bloomberg Intelligence Says
The court likely will grant investors’ request to find the statements were false. Theoretical damages could be as high as $12 billion, but we think settlement value may be $260-$380 million.
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Investors are asking Chen to decide a couple of key legal issues by himself, without putting them to a jury. A ruling in favor of the investors would allow them to focus at trial solely on connecting Musk’s alleged false statement to their stock market loss.
Back in 2018, the tweet also got Musk and Tesla sued for fraud by the
“Let’s talk about falsity,” Chen said at the start of Thursday’s hearing. Much of the debate that followed focused on “Funding secured.”
“None of Mr. Musk’s deals have ever had a funding issue,” he told the judge. The entrepreneur -- now the world’s
Yet, Musk never spoke to any potential investors other than the Saudi fund, which he intended to only take a small stake in the unformed transaction, Porritt said. “The whole thing was so tentative, so pie in the sky at this point in time, that he never had an idea of how much money” it would require, the lawyer said.
Chen had his doubts, too.
There was no term sheet with the Saudi fund, no price and no conditions laid out, Chen said. “A lot of things hadn’t been discussed, it seemed quite preliminary,” he said, adding: “How can there be a quote, deal, even if it’s a handshake deal?”
The judge said he’d issue a final ruling later.
(Updates with Bloomberg Intelligence analyst)
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