(Bloomberg) -- Elon Musk will start in a San Francisco courtroom Monday where he left off last week — defending himself against claims that a pair of tweets he hastily fired off 4 1/2 years ago caused Tesla (NASDAQ:TSLA) investors to suffer millions of dollars in losses.
In his first minutes on the witness stand Friday, the renowned entrepreneur and prolific Twitter user offered a remarkably modest assessment of his influence on the social media network that he now owns: “Just because I tweet about something doesn’t mean people believe it or will act accordingly.”
The testimony showed Musk minimizing his role in the electric car-maker’s surging stock price after he tweeted on Aug. 7, 2018, that he had “funding secured” to take Tesla private at $420-a-share and added that “investor support is confirmed.”
Court adjourned Friday before the lawyer for investors, Nicholas Porritt, could ask Musk directly about the contents of the tweets. On Monday, Porritt is expected to drill into his theme that Musk actually had no deal in place for what would have been a $60 billion transaction.
Musk has said he believed he had financing in place based on a commitment from Saudi Arabia’s Public Investment Fund. Text messages between Musk and the sovereign wealth fund’s governor, Yasir Al-Rumayyan, are evidence at the trial. Their exchange, a few days after the tweets shocked markets, shows Musk upset because he thought Al-Rumayyan was walking away from a handshake agreement.
But Al-Rumayyan tells Musk that the PIF can’t make a commitment “that we don’t have sufficient information on,” adding that he’s been waiting for additional details.
Porritt is likely to grill Musk about how he could have possibly thought financing was in place.
“The evidence will show that the Public Investment Fund and its discussions with Mr. Musk had never committed any funding in those discussions,” Porritt told jurors last week in opening arguments. The amount of funding and the price at which Tesla would go private “had not even been discussed,” he said.
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Porritt may also try to rile Musk by picking apart how his take-private plan quickly unraveled.
Guhan Subramanian, an expert witness who teaches business and law at Harvard University, called the plan an “extreme outlier” that didn’t conform to industry standards. He told jurors Friday that the time from Musk making his pitch to Tesla’s board to his public disclosure was five days — which the professor called an “incredibly short timeline” compared with 151 days between those steps in the 2013 deal to take Dell Inc. private.
Musk didn’t consult with legal or financial advisers before disclosing details on Twitter, and Tesla’s board let him tweet without any “guardrails,” Subramanian said.
It was “troubling” that important public information that’s relevant to the market was being communicated “through this fairly casual channel,” he said.
Musk is scheduled to start testifying at about 8:30 a.m. local time. After Porritt finishes questioning him, Musk’s own lawyers will get a turn. Court filings indicate that when Musk’s testimony concludes, the jury will hear from an analyst at JPMorgan Chase & Co., followed by Tesla’s head of investor relations.
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