Elon Musk says he was going to sell SpaceX stock to take Tesla private

Elon Musk speaks near a Falcon 9 rocket while announcing that Japanese billionaire Yusaku Maezawa will be the first private passenger to fly around the Moon aboard the SpaceX BFR launch vehicle.

David McNew | AFP | Getty Images

Elon Musk He told a San Francisco federal court on Monday that he could have sold shares in SpaceX to take over Tesla private in 2018. He was then, and still is, CEO and largest shareholder in both companies.

Musk is being sued by Tesla shareholders for a series of tweets he wrote in August 2018 saying he had “secured financing” to take the automaker private for $420 per share, and that investor support for the deal was “confirmed.” Trading in Tesla halted after his tweets, and its share price remained volatile for weeks.

Contributors to the approved class action claim that Musk’s tweets were reckless and false, and that relying on his statements to make investment decisions cost them large sums of money.

I will musk claim later That he had a verbal commitment from Saudi Arabia’s sovereign wealth fund, and was sure the financing would come at the price he suggested based on the handshake. However, the deal did not materialize.

During his second day on the witness stand, Musk claimed that another reason he said he had “financed” a deal back in 2018 was because he could have sold stock in SpaceX, a US defense and satellite internet company that he also runs. to finance the deal.

Under oath, Musk said, “SpaceX stock alone means ‘secured financing’ by itself. Not that I want to sell SpaceX stock but I can have it, and if you look at the Twitter transaction – that’s what I did. I sold Tesla stock to complete a transaction Twitter. And I would do the same here.”

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Musk did not say how many shares of the reusable rocket maker he could have sold, to whom, and at what price in order to finance the Tesla purchase.

In April 2018, SpaceX said in a filing Securities and Exchange Commission filing It raised about $214 million as part of a funding round in which it was seeking more than $500 million in total equity financing.

The shareholder’s attorney, Nicholas L. Porritt of Levi & Korsinsky, asked Musk if his proposed price for Tesla shares was a joke because 420 is a reference to hemp in popular culture.

Musk insisted this was a coincidence. He said, “There’s some karma, I think, about 420… I have to wonder if that’s good or bad karma at this point.”

This is not the first legal action Musk has faced over his tweets. The Securities and Exchange Commission charged Musk and Tesla with civil securities fraud shortly after they were sent, and they paid a $20 million fine to the federal agency to settle the charges. They later signed a revised consent decree requiring Musk to temporarily step down from his role as chairman of the board at Tesla, and to have a securities attorney vet tweets containing material business information about Tesla before he posts them.

Musk recently became CEO of the social media division Twitter after leading the $44 billion purchase of the company in October 2022. Saudi Prince Alwaleed bin Talal bin Abdulaziz is the social media company’s second largest shareholder after Musk. This past November, Sen. Chris Murphy, D. I sent a message To the Committee on Foreign Investment in the United States Request a review of financing the Musk-Twitter deal.

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