The San Francisco trial has begun alleging that Elon Musk deceptively drove up the price of Tesla’s stock.
Tesla investors are seeking ‘billions’ in damages on behalf of those who traded stock after Musk posted plans to take the company private.
However, Tesla never went private.
The attorney for a group of shareholders suggested the billionaire businessman “lied” when he tweeted in 2018 that he had secured funding to take the company private.
Musk said in the tweet he had “secured” funding, and the investor baking was “confirmed.” It caused shares to fall, and then to soar.
Less than three weeks later, he backtracked on those plans.
During opening statements, Nicholas Porritt, lead attorney for the investors, told a jury in San Francisco that “millions of dollars were lost when [Musk’s] lies were exposed”.
The plaintiffs portrayed Musk as a reckless liar who caused “regular people” to lose millions.
Meanwhile, Musk’s defense team painted him as a well-intentioned visionary who merely used the “wrong words” in describing the deal.
Musk’s attorney, Alex Spiro, said the controversial chief executive was “serious” about the deal.
“You will come to learn very soon that this was not fraud, not even close,” he said during opening statements. Musk believed financing was not an issue and was “taking steps” to make a deal happen, Spiro added.
The lawyer did however tell the jury that Musk’s Twitter post contained some “technical inaccuracies”.
The judge, Edward Chen, denied a request by Musk to have the case moved to Texas last week, with the billionaire expressing concern that potential jurors in California would be biased against him.
A jury of nine will decide whether Musk’s tweets artificially inflated Tesla’s share price by playing up the status of funding for the deal, and if so, by how much.
Musk could end up taking the stand as early as tomorrow.