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Billionaire Musk likely to 'double down' on tweets after court victory

Published 02/03/2023, 07:59 PM
Updated 02/03/2023, 08:11 PM
© Reuters. FILE PHOTO: Tesla CEO Elon Musk and his security detail depart the company’s local office in Washington, U.S. January 27, 2023.  REUTERS/Jonathan Ernst
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By Jody Godoy and Jonathan Stempel

(Reuters) - Elon Musk may become even more emboldened in his Twitter use after a jury cleared the billionaire Tesla (NASDAQ:TSLA) Inc chief executive over his missive that he had "funding secured" to take his electric car company private.

A San Francisco jury took just two hours to unanimously find the world's second-richest person not liable for having allegedly tweeted fraudulently in August 2018 about a possible Tesla buyout.

Musk is likely to "double down" on his communication tactics after the verdict, said Minor Myers, a professor of corporate law at the University of Connecticut.

"This is only going to embolden him to act as he sees fit," Myers said.

Musk ultimately abandoned his effort to take Tesla private, but told jurors early in the three-week trial that he had believed what he wrote in tweets.

Karen Woody, an associate professor at Washington and Lee University School of Law, said she thought the case was "rock-solid" against Musk and she was shocked at the verdict.

"He pushed the boundaries, and won," she said. "I expect Elon is going to write anything he wants,"

Musk himself thanked the jury on Twitter -- which he bought in October for $44 billion.

"Thank goodness, the wisdom of the people has prevailed," he wrote.

The Tesla shareholders who sued Musk had sought billions of dollars in damages.

Musk's raw tweeting style has made him a hero for many, and burnished the Tesla brand.

He fought hard against accusations that he had not told the truth, with his lawyer, Alex Spiro, telling the jury that the "funding secured" tweet was only technically inaccurate.

"Who cares about bad word choice?" Spiro said during closing arguments.

The tweets led to Musk and Tesla paying $40 million to resolve U.S. Securities and Exchange Commission civil charges under a consent agreement that Musk has fought unsuccessfully to lift.

"He doesn't want to play by SEC rules as the SEC understands them, and the SEC doesn't want to be perceived as backing down," said Adam Pritchard, a University of Michigan law professor. "I expect them to continue having their difficulties."

Still, many analysts said Musk, who has tweeted more than 22,000 times and has about 128 million Twitter followers, has no reason to slow down now.

© Reuters. FILE PHOTO: Tesla CEO Elon Musk and his security detail depart the company’s local office in Washington, U.S. January 27, 2023.  REUTERS/Jonathan Ernst

"Many people, when confronted by a lawsuit of this type would have dialed back tweeting," said Kim Forrest, chief investment officer at Bokeh Capital Partners. "But that wasn't the case in the Twitter deal, was it?

"Musk lives by his own rules, or so it seems," Forrest said.  

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