Trial for Elon Musk's 2018 Plan to Take Tesla Private

Elon Musk will attempt to defend that claim in a trial that started on Tuesday in a federal court in San Francisco, more than four years after he claimed to have the funding to delist Tesla

The case is brought by investors who claim Mr Musk, the electric automaker’s chief executive, had not in fact lined up the money to take Tesla private and acted recklessly in discussing the embryonic plan to do so If the plaintiffs get a jury to rule in their favor, Tesla and Mr Musk could be forced to pay billions of dollars in damages

The trial centers on what Mr Musk said on Twitter, which he acquired in October “Am considering taking Tesla private at 420 Funding secured,” he wrote in a post on Aug 7, 2018

Tesla’s stock price jumped after the tweet was published but sank after the proposal fizzled The plaintiffs, Glen Littleton and other investors, assert that Mr Musk’s actions were responsible for the losses they suffered on Tesla’s stock movements

The company, Mr Musk and their lawyers have defended the post and said it wasn’t a reckless act

Mr Musk and Tesla settled a separate lawsuit that the Securities and Exchange Commission had filed over his plan to take the company private They paid fines to the SEC, and Mr Musk agreed to step down as chairman of Tesla and to have a lawyer review certain statements he makes about the company on social media before publishing them

The investors’ lawsuit is going to trial in US District Court at a difficult time for Mr Musk and Tesla The company is selling fewer cars than executives promised and analysts expected, forcing Tesla to lower prices Twitter’s revenue has tumbled because many corporations are no longer running ads on the platform after Mr Musk’s erratic behavior and his decision to fire a large majority of the company’s employees

The case could prove to be difficult for Mr Musk and Tesla, legal experts said The senior district judge hearing the case, Edward M Chen, ruled last year that he agreed with the plaintiffs that Mr Musk’s 2018 Twitter posts about taking Tesla private were false and that Mr Musk was, in the words of the investors, “deliberately reckless” about the truth when making the statements

“You’ve already got summary judgment on recklessness and false statement,” said Adam C Pritchard, a law professor at the University of Michigan “These are the two most common defenses that defendants prevail on”

Still, Judge Chen did not side with the investors on other parts of their case — and that could give Mr Musk a path to victory The plaintiffs have to show that the money they lost on Tesla stock was tied to a statement by Mr Musk that the court finds to be false, such as the claim that he had the funding, legal experts said

Next : Ganesh Chathurthi: Prayer Intentions for the 8th Day of Pooja
Read More