Scott Olson
A jury in San Francisco ruled Friday in favor of Tesla founder Elon Musk in a shareholder class action lawsuit over his 2018 “funding secured” tweets. in which the businessman claims to have enough money to buy Tesla (NASDAQ:TSLA) private.
“Thank goodness, human wisdom prevailed!” musk tweeted Friday after jurors in a federal civil trial were found on his behalf. “I appreciate the jury’s consensus on innocence in the Tesla private case 420.”
Class action attorney representing Tesla shareholders (TSLA) sued over a tweet on August 7, 2018, in which Musk wrote, “I’m considering taking Tesla private for $420. Funding guaranteed.”
The tweet that sent TSLA spiked 11% to $387.46 that day, though the stock failed to hit $420 when the idea of privacy was born. It turns out that while Musk has talked to Saudi investors about financing a private deal, that funding isn’t actually “safe”.
TSLA stock eventually fell as much as about 35% on the day a month after Musk’s tweet and the private sale never went through.
The US Securities and Exchange Commission previously sued Musk over the incident, reaching an out-of-court settlement in which he and Tesla (TSLA) was once paid $20 million, and Musk stepped down as chairman of the electric-car maker. Friday’s jury verdict came in an unrelated case brought by individual shareholders.
musk last month witness to defend himself at trial in San Francisco, saying the Saudi investors he spoke to “obviously” wanted to help take the company private.
And while Tesla (TSLA) initially fell when the private sale was broken, the stock then began a multi-year rally. In November 2021, TSLA hit a peak of about 1,500% from August 7, 2018, the high after factoring the stock split.
Even with TSLA’s big drop over the past year, the stock closed Friday at $189.98, representing a gain of more than 635% from August 7, 2018, a high after taking into account stock splits.
Search for Alpha Contributors segmented by where Tesla (TSLA) go from here. Recent Alpha Investment Research column fabricate a “Buy” case for the stock, while contributor Sean Chandler gave TSLA a Reviews “Sell”.
