Tesla Inc (NASDAQ:TSLA) CEO Elon Musk’s 2018 tweet that he was considering taking the company private at $420 a share was “entirely truthful,” Bloomberg News reported on Tuesday, citing a court filing.
What Happened: Tesla lawyers said in a court filing that the electric vehicle maker had secured support from Saudi Arabia’s sovereign wealth fund to take the company private.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
“Mr. Musk was considering taking Tesla private at $420 a share. Funding was secured. There was investor support,” the Bloomberg report noted, citing a heavily redacted filing by attorney Alex Spiro.
A hearing for a pending class-action lawsuit in the San Francisco federal court by shareholders, alleging the tweets were false, is scheduled in March.
Shareholders said that Musk’s tweets spurred wild swings in the company’s share price and caused billions of dollars in losses. The investors are seeking a judge’s ruling — ahead of a trial set for May 31 — that the tweets were false statements. A hearing is scheduled in March.
“Not only did Mr. Musk firmly believe funding was secured when he tweeted, in reality (per Mr. Musk’s discussions with the PIF) it was secured,” Spiro’s filing, which refers to the acronym for Saudi Arabia’s Public Investment Fund, noted, as reported by Bloomberg.
See Also: Tesla Countersues JPMorgan Over Disputed Bond Contract; Bank Says 'No Merit' To Claim
Why It Matters: Musk’s tweet in Aug. 2018 that he might take Tesla private and that he had “funding secured” led to a course reversal for the stock, making the price volatile.
Musk's erratic tweet led to intense regulatory scrutiny, civil lawsuit, $40 million fine and cost him Tesla's chairmanship for three years.
Price Action: Tesla shares closed 0.58% lower at $931.25 a share on Tuesday.
Photo: Courtesy of Tesla
