Elon Musk faces trial over Tesla tweets

SAN FRANCISCO (AP):

While still grappling with the fallout from a company he did take private, beleaguered billionaire Elon Musk is now facing a trial over a company he didn't.

Long before Musk purchased Twitter for $44 billion in October, he had set his sights on Tesla, the electric automaker where he continues to serve as CEO and from which he derives most of his wealth and fame.

Musk claimed in an August 7, 2018 tweet that he had lined up the financing to pay for a $72 billion buyout of Tesla, which he then amplified with a follow-up statement that made a deal seem imminent.

But the buyout never materialised and now Musk will have to explain his actions under oath in a federal court in San Francisco. The trial, which began yesterday with jury selection, was triggered by a class-action lawsuit on behalf of investors who owned Tesla stock for a 10-day period in August 2018.

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Musk's tweets back then fuelled a rally in Tesla's stock price that abruptly ended a week later, after it became apparent that he didn't have the funding for a buyout after all. That resulted in him scrapping his plan to take the automaker private, culminating in a $40 million settlement with US securities regulators that also required him to step down as the company's chairman.

Musk has since contended he entered that settlement under duress and maintained he believed he had locked up financial backing for a Tesla buyout during meetings with representatives from Saudi Arabia's Public Investment Fund.

The trial's outcome may hinge on the jury's interpretation of Musk's motive for tweets that US District Judge Edward Chen has already decided were a falsehood.

Chen dealt Musk another setback on Friday, when he rejected Musk's bid to transfer the trial to a federal court in Texas, where Tesla moves its headquarters in 2021. Musk had argued that negative coverage of his Twitter purchase had poisoned the jury pool in the San Francisco Bay area.