Elon Musk has been cleared of misleading investors when he tweeted in 2018 that he had "funding secured" to take the electric car company private.
Shareholders accused Mr Musk of misleading them on August 7, 2018, by tweeting that he could take Tesla private at $420 per share, a 23 per cent premium to its last closing price. The proposed £72billion (£60billion) buyout never took place.
After less than two hours of deliberation wrapping up a three-week trial, a jury in San Francisco ruled on Friday that the Tesla CEO had not deceived investors with two tweets posted in August 2018 about the proposed Tesla buyout.
One tweet on August 7, 2018 read: “Am considering taking Tesla private at $420. Funding secured.”
After the verdict was read, Mr Musk tweeted: “Thank goodness, the wisdom of the people has prevailed.
“I am deeply appreciative of the jury’s unanimous finding of innocence in the Tesla 420 take-private case.”
Nicholas Porritt, a lawyer for the Tesla shareholders, urged the jurors to rebuke Musk for his “loose relationship with the truth”.
“Our society is based on rules,” Mr Porritt said. “We need rules to save us from anarchy. Rules should apply to Elon Musk like everyone else.”
Mr Musk’s lawyer Alex Spiro countered that Musk’s "funding secured" tweet was "technically inaccurate" but that investors only cared that Mr Musk was considering a buyout.
"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.”
An economist hired by the shareholders had calculated investor losses as high as $12billion (£9.9billion).
During the three-week trial, Mr Musk spent nearly nine hours on the witness stand, telling jurors he believed the tweets were truthful.
He said he had lined up the necessary financing, including a verbal commitment from Saudi Arabia’s sovereign wealth fund, the Public Investment Fund. The fund later backpedaled on its commitment, Mr Musk said.
Mr Musk later testified that he believed he could have sold enough shares of his rocket company SpaceX to fund a buyout, and "felt funding was secured" with SpaceX stock alone.
Mr Musk testified that he made the tweets in order to put small shareholders on the same footing as large investors who knew about the deal. But he acknowledged he lacked formal commitments from the Saudi fund and other potential backers.
