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Elon Musk says he would sell shares in SpaceX to take Tesla private

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Elon Musk speaks near the Falcon 9 rocket during the announcement that Japanese billionaire Yusaku Maezawa will be the first private passenger to fly around the moon aboard SpaceX’s BFR launch vehicle.

DAVID McNEW | AFP | Getty Images

Elon Musk said Monday in San Francisco federal court that he could have sold SpaceX stock to pick it up Tesla private in 2018. He was then and still is the CEO and largest shareholder of both companies.

Tesla shareholders sued Musk over a series of tweets he wrote in August 2018 that said he had “secured financing” to take the automaker private for $420 a share and that there was “investor support” for such a deal. “confirmed”. Tesla’s trading was halted after his tweets, and its stock price remained volatile for weeks.

The shareholders allege in the certified class action that Musk’s tweets were reckless and false, and that relying on his statements in making investment decisions cost them significant money.

A mask would later claim that he had a verbal commitment from Saudi Arabia’s sovereign wealth fund and was confident that funding would be obtained at the price he offered on a handshake basis. However, the deal never happened.

During his second day of testimony, Musk argued that another reason he said he had “secured financing” for the deal in 2018 was because he could sell shares in SpaceX, the U.S. defense contractor and satellite internet company, which he also manages. , to finance the transaction.

Musk said in an affidavit: “SpaceX stock by itself represents “secured financing.” It’s not that I want to sell SpaceX stock, but I could, and if you look at the transaction on Twitter, I did. I sold Tesla stock to complete the Twitter transaction. And I would do the same here.”

Musk did not say how much stock in the rocket maker he might sell, to whom or at what price, to finance the Tesla buyout.

In April 2018, SpaceX stated in a Submission of documents to the Securities and Exchange Commission that it raised about $214 million in a funding round in which it was seeking more than $500 million in total equity funding.

Shareholder attorney Nicholas L. Porritt of Levi & Korsinsky asked Musk whether his proposed price for Tesla stock was a joke, as 420 is a reference to hemp in pop culture.

Musk insisted it was an accident. He said: “I think there’s some karma around 420… I have to wonder if that’s good karma or bad karma at the moment.”

This isn’t the first lawsuit Musk has faced over his tweets. The SEC accused Musk and Tesla of civil securities fraud shortly after he sent them, and they paid separate $20 million fines to the federal agency to settle the charges. They later signed a revised consent decree that required Musk to temporarily step down as chairman of Tesla’s board of directors and to have a securities lawyer review tweets containing material business information about Tesla before he publishes them.

Musk recently became CEO of social media company Twitter after leading a $44 billion buyout of the company in October 2022. Saudi Prince Alwaleed bin Talal bin Abdulaziz is the second largest shareholder in the social media company after Musk. Last November, Sen. Chris Murphy, D.-Conn. sent a letter to the Committee on Foreign Investment in the United States requesting a review financing the Musk-Twitter deal.

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