A tweet by Elon Musk claiming he had enough money to take Tesla private in 2018 caused billions of dollars in losses to investors after the deal collapsed, according to estimates presented on Wednesday. Three at a trial examined the negligent handling of the proposed acquisition.
Astonishing estimates are given by two experts hired by attorneys to represent Tesla shareholders highlighted the challenges the nine-person jury faces as the three-week trial ends this week. US District Judge Edward Chen is expected to turn the case over to a grand jury on Friday.
Depending on the ruling, Musk and the electric car maker he runs could face more financial damage because of his unpredictable behavior on the internet. Twitter foundation that he currently owns. Not admitting any wrongdoing, musk and Tesla reached a settlement of $40 million (Approximately Rs. 330 crore) with securities regulators following Musk’s troubling tweets in August 2018.
In this class action lawsuit on behalf of Tesla shareholders, jurors must first determine whether two tweets Musk abruptly posted on August 7, 2018 led Tesla investors in the wrong direction. Are not. If the jury decides to hold Musk accountable for tweets that Chen has deemed untrue, they will face an even more formidable task – trying to count Musk – one of the richest people in the world – and how much Tesla pays for misleading tweets.
One of the two experts on Tuesday, the economist Michael Hartzmark, looked at a report that featured a variety of terms like “but-for” and “consequential inflation” that made a case for calculating the damage. incurred by Tesla shareholders over a 10-day period in August 2018 was anywhere from $4 billion (approximately Rs 32,700 crore) to $11 billion (approx Rs 90,000 crore), or 22.55 dollars (about 1,800 rupees) to 66.67 dollars (about 5,500 rupees) per Tesla share at that time.
Another expert, University of Maryland finance professor Steven Heston, reviewed an even denser report analyzing the impact of Musk’s tweets on more than 2,000 Tesla stock options. is based on a formula known as the Black-Scholes model that is widely used by companies for pricing. executive compensation package.
When pressed by a lawyer for Musk about the reliability of his model, Heston admitted: “All models deviate from reality, which is why they are models.”
Heston, who said he was paid $300,000 (approximately Rs 2.5 crore) to $350,000 (approx Rs 2.8 crore) for his work on the case, declined to attempt to give it up. specific estimate of the investor’s losses, say it’s a job for jurors.
The crux of the case revolved around an August 7, 2018 tweet in which Musk claimed “funding is guaranteed” to take Tesla private. Musk abruptly tweeted a few minutes before boarding his private jet after being informed that the Financial Times was about to publish a story that the Public Investment Fund of Saudi Arabia had spent about $2 billion (about Rs 16,350 crore) to buy a 5% stake in Tesla. diversified its interests beyond oil, according to his testimony.
Amid widespread confusion over whether Musk’s Twitter account was hacked or if he was joking, hours later Musk posted another tweet suggesting an impending deal.
During the roughly eight-hour affidavit, Musk repeatedly asserted that he was in the best interests of shareholders and believed he had a commitment to funding from the Saudi fund, but that commitment was later withdrawn. his “funding guaranteed” tweet. the acquisition by raising money from other investors and selling some of its shares in spacea rocket ship manufacturing company that he founded.
After consulting with Tesla’s major shareholders, Musk has decided that the electric car maker should continue to be publicly traded – a decision that has benefited him and other investors. other investment. Tesla shares are now worth eight times what they were when Musk bought back the tweet, after adjusting for the two stock splits that have occurred since then.
