Elon Musk was found not liable in a class-action securities fraud trial that centered on the Tesla CEO’s now infamous “funding secured” tweet.
After less than 90 minutes of deliberation, a jury announced the verdict in the trial that kicked off three weeks ago in San Francisco. The outcome of the trial sent Tesla shares up about 1.5% in after-hour trading to $189.98.
The central question in the lawsuit was whether Musk was liable for losses suffered by shareholders after he posted in August 2018 several messages on Twitter that he had secured funding to take Tesla private. Musk initially tweeted “Am considering taking Tesla private at $420. Funding secured.” Another pair of tweets soon followed: “Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote” and then another stating that he doesn’t have a controlling vote now and “wouldn’t expect any shareholder to have one if we go private.”
Plaintiffs attorneys representing investors argued that these shareholders suffered financially as a result. Musk, Tesla and its board, faced billions of dollars in damages.
The trial was not to determine whether those tweets were true. That question had already been answered. Edward M. Chen, the federal judge overseeing the case, ruled that the tweets were untrue and Musk was reckless for posting them.
The three-week trial was largely a tug-of-war over language and intent.
This story is developing …
