In court, Elon Musk says he had ‘secured funding’ – but ‘not a specific number’

Elon Musk told a jury on Tuesday he was confident he could have withdrawn his proposal 4½ years ago to take Tesla private, saying he never had trouble raising money for his businesses.

The chief executive, in his third day on the witness stand, was defending the legitimacy of his claim in an August 2018 tweet that he had “secured funding” for the privatization transaction.

“Every funding round I’ve had has been oversubscribed,” he testified in federal court in San Francisco on Tuesday in response to friendly questions from his own attorney. “It’s not a problem for me to raise funds. I’ve done a good job for the investors, and if you do a good job, they give you money.

In addition to Tesla, Musk runs SpaceX, the closely held rocket company; he co-founded OpenAI, the company best known for developing the artificial intelligence tool ChatGPT; and it acquired Twitter in October for $44 billion.

Musk spent most of his roughly four hours on the stand the day before facing a lawyer for investors who claim the billionaire’s Twitter posts in August 2018 were misleading – and caused heavy losses to shareholders who bet on his tweets.

Although the investor’s attorney, Nicholas Porritt, tried to show the short-lived proposal to be empty, lacking the most basic details, Musk told jurors he was certain of the funding. He testified about the possibility of using his holdings in SpaceX to help finance the transaction, as well as a multi-billion dollar commitment by the Saudi sovereign wealth fund.

Musk also said his actual language in the Aug. 7, 2018 tweet – “Consider taking Tesla private” – was not the same as saying “deal will be done”.

He said Tuesday the purpose of his tweets was to be transparent and “do the right thing” with Tesla shareholders.

“I’m making it very clear that either scenario is possible,” he said. “We can go private or not.”

Musk testified that Dan Dees, a Goldman Sachs Group executive he spoke to about the privatization plan, was very complimentary about how Musk explained his rationale in a Tesla blog post the same day as his tweet.

“I thought your letter today was excellent,” Dees wrote to Musk in an email that was shown to the jury. “Very clear. At GS, we’re ready to help. Call me anything – 24/7.

Musk told jurors that Tesla’s relationship with JPMorgan Chase & Co. had soured.

He testified that he “removed all commercial banking from JPMorgan which, to say the least, made JPMorgan hate Tesla and me.”

Musk generally performed better as a witness on Tuesday than on Monday, when he admitted in court that he had had a poor night’s sleep and complained during his fourth hour on the stand that he was suffering from back pain.

Porritt was unable to deliver as many blows to Musk’s narrative in the final hour of the CEO’s testimony on Tuesday before he was excused.

But Porritt reluctantly made Musk acknowledge that he never secured commitments for specific funding amounts for the Tesla privatization deal from the Saudi fund — or any bank or person.

“Not a specific number,” Musk said. He had previously testified that he thought the Public Investment Fund’s support was “unequivocal” and added on Tuesday that “PIF can privatize Tesla 150 times.”

Musk was also confronted with his failure to mention the possibility of exploiting SpaceX shares when he submitted a written explanation to the court in 2021 on the progress of the financing of the privatization agreement in 2018. Musk said on Tuesday that he ‘d mentioned SpaceX to the Securities and Exchange Commission in its 2018 investigation into the tweets, but forgot to mention it in the pending case until Monday.

“It was a mistake on my part not to mention it here,” he said.

Later, Tesla’s head of investor relations, Martin Viecha, testified that Musk’s tweets sparked a barrage of questions about whether “this [is] a real event or is it made up. He said that before the tweets were published, he had no experience with privatization in his previous job as a side-selling analyst.

Viecha said he had told many investors that the privatization plan was indeed a “binding offer,” but had not clarified that language with Tesla’s chief financial officer or others in the business. ‘business.

“I had understood that Saudi PIF would take control of the business,” Viecha said. “I don’t really know if there was a commitment letter or if there was a verbal agreement.”

Bloomberg editor Dana Hull contributed to this report.

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