Elon Musk says he had no investors to take Tesla private

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Elon Musk says he had no investors to take Tesla private

Elon Musk expected strong financial support when he said he would take Tesla private in 2018 but lacked specific commitments from potential backers, according to testimony he gave on his third day of questioning in a San Francisco federal court.

Musk is accused of defrauding investors by driving up the price of Tesla stock by tweeting on 7 August 2018 that he had funding secured to take the electric carmaker private.

The trial is looking into whether the world's second-richest person can be held responsible for his use of Twitter. Millions of dollars are at stake for shareholders who claim to have suffered losses after Musk tweeted that investor support is confirmed for the deal.

After Musk s tweets, Tesla's stock price surged and fell later when it became clear that the buyout would not happen.

Musk told the jury on Tuesday that he could have drawn upon several sources of financing to take Tesla private, from existing shareholders like Oracle Corp co-founder Larry Ellison to Saudi Arabia's sovereign wealth fund or his own fortune.

Musk said that funding wasn't an issue. It was quite the opposite. Musk, however, said he did not have binding agreements with investors, leaving it to the jury to decide if he misled shareholders.

A jury of nine will decide whether the Tesla CEO artificially inflated the company's share price by promoting the buyout's prospects.

Musk said that he was trying to inform investors about his interest in taking Tesla private after he was asked by his lawyer Alex Spiro. Musk said he had discussed his interest with the Tesla board and Saudi Arabia's sovereign wealth fund and he feared it would leak to the media.

He said that he had no ill motive. I wanted to do the right thing for shareholders. Musk told the jury he decided to drop the idea of taking the company private after getting feedback from shareholders.

After talking to a number of investors, especially the smaller investors, they said they would prefer a Tesla that remained public, and I felt it was important to be responsive to their wishes, Musk said.

After the tweet at which Goldman Sachs, which was working with Musk on the proposed deal, showed the jury notes and documents from a board meeting, the jury was shown that there would be more than enough funding to take the company private.

Goldman Sachs did not reply to a request for comment.

Musk said he did not have binding agreements for financing from any interested party when questioned by Nicholas Porritt, a lawyer for the investors.

Musk repeatedly resisted the yes or no responses sought by Porritt about discussions over funding pledges by the Saudi fund, prompting the judge to help with the questioning.

Musk said on Monday that he could have financed the deal by selling his stake in SpaceX, the aerospace company where he is also chief executive officer. He said that he believed that financing had been pledged by the Saudi fund before they backpedalled.

The tweet resulted in a $40 million settlement with securities regulators.

After it became apparent that the money was not in place to take Tesla private, Musk stepped down as Tesla's chairman and continued CEO as part of the Securities and Exchange Commission settlement, without acknowledging any wrongdoing.

The trial is expected to continue next week with testimony from Tesla board members and experts.