Court acquits Elon Musk for alleged ‘misleading’ tweets

A court in San Francisco ruled on Friday that Musk shouldn’t be held liable for investor’s losses after the CEO of Tesla tweeted in 2018 that he was “considering taking Tesla private at $420. Funding secured”.

Small recap: Five years ago, Musk pondered on taking Tesla from the stock exchange, turning it into a private company after he got fed up with shorters betting against the company. As part of his ‘Tweet first’ strategy, he announced his thoughts publicly through the social network he currently owns, causing a stir on the stock exchange.

Already fined

The American Security and Exchange Commission (SEC) judged that Musk exaggerated when he stated that the funding was secured and was accused of market manipulation and fraud.

After a row, both reached an agreement in which Musk stepped down as chairman of the board at Tesla for three years and paid $40 million in fines (equally spread between Tesla and Musk, but eventually all of it paid by the company’s CEO).

However, a group of investors pressed charges against Musk, claiming they lost millions because of the tweet, which led to the court case called ‘Tesla 420 take-private case’, in which he was judged not guilty by the jury.

Musk had to appear in court in person, where he tweeted the message out of the conviction that “small shareholders have the right to the same information as big investors, who were informed about a potential deal”. But he acknowledged that the plan was very much a plan at the moment of tweeting without any formal agreement hanging. And it never materialized, after all.

Encouragement for Musk

In his defense, Musk’s lawyer admitted that the post was “rushed but indisputably true”. The jury followed both men in their arguments. Minor Myers, a Professor of Law at Connecticut University, commented: “This will encourage Musk to act as he deems necessary,” pointing at how the court ruling fails to change the tweeting behavior of the businessman.

Myers is joined by his colleague, Karen Woody, Professor at Washington and Lee University School of Law. He utters surprise over the jury’s verdict since the case against Musk was regarded ‘strong’: “I suspect he will now start writing whatever he wants.” Since the hiccup, Tesla and Musk have agreed that the legal department reviews his tweets concerning the company’s operations.

And how did Musk react to the verdict? Well, in a tweet, of course. “Thank goodness, the wisdom of the people has prevailed! I deeply appreciate the jury’s unanimous finding of innocence in the Tesla 420 take-private case.”