Elon Musk’s Tesla Tweets Trial: What We Learned From His Testimony

Elon Musk, over three days of testimony during the past week, gave his reasoning behind the 2018 tweet in which the Tesla Inc.

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chief executive said he had secured funding to take the electric-car maker private.

The trial centers on the now-famous tweet by Mr. Musk from Aug. 7, 2018, that reads: “Am considering taking Tesla private at $420. Funding secured.” A class of Tesla investors are suing Tesla, Mr. Musk and other board members at the time, arguing the tweet spurred investment decisions that led them to collectively lose billions of dollars as it became clear a deal wouldn’t take place.

Here is what we learned from Mr. Musk’s testimony in federal court in San Francisco:

Was there a written agreement to take Tesla private?

No. Tesla had held discussions with Saudi Arabia’s sovereign-wealth fund, the Public Investment Fund, about taking Tesla private, including a meeting in late July 2018 to discuss the issue, according to Mr. Musk’s testimony and court records. Mr. Musk said he and the PIF didn’t discuss a specific price for taking Tesla private or have a written agreement.

Tesla CEO Elon Musk tested in a federal trial over tweets from 2018 in which he floated the possibility of taking the company private. WSJ’s Rebecca Elliott explains what to know about the trial. Illustration: Adele Morgan

What made Mr. Musk think he had secured funding?

Mr. Musk, on the stand, said he was certain raising the money to take Tesla private wouldn’t be an issue. The Tesla chief executive said that the PIF, as an arm of the Saudi Arabian government, would have adequate funding to finance any transaction even if financing details hadn’t been discussed when he sent the tweet.

How could Mr. Musk takes Tesla private if not with Saudi backing?

Mr. Musk also tested that he could have sold part of his stake in rocket company SpaceX to finance a transaction. “With the SpaceX stock alone, I felt funding was secured,” Mr. Musk said on Jan. 23, referring to the company formally known as Space Exploration Technologies Corp.

The billionaire pointed to his sale of Tesla stock to help fund the acquisition of Twitter Inc. last October, valued at $44 billion, as evidence he would have been ready to part with some of his SpaceX holdings to take the car maker private.

Mr. Musk also indicated there were other financing options and touted his fundraising prowess. “I believe every financing round I’ve ever done has been oversubscribed,” he said in response to a question from one of his lawyers.

Why did Mr. Musk send the tweet?

Mr. Musk said he was aiming to inform, not mislead investors, when he sent the tweet while en route to catch a private flight.

“I was trying my best to keep shareholders informed and ensure that all shareholders had the same information.” Musk said.

He also used his testimony to suggest the character limit Twitter puts on tweets restricted how much he could convey to his audience. “I think you can absolutely be truthful. But can you be comprehensive? Of course not,” Mr. Musk told judges.

How did this testimony compare with prior court appearances by Mr. Musk?

Mr. Musk has demonstrated in past legal skirmishes that he can be a colorful and combative witness. In a 2021 trial over Tesla’s acquisition of SolarCity Corp., for example, Mr. Musk called opposing counsel “a bad human being.” He tested at the time that Tesla’s goal was to be much more than a car company.

By those standards, Mr. Musk’s most recent court appearance was sedate. At one point, asked whether he used Twitter to tweet about Tesla, he said, “That is one of the things I tweet about, also memes.”

He also featured a message sent by a PIF executive as “ass covering.” The PIF didn’t respond to a request for comment.

On Jan. 24, Mr. Musk expanded on the backstory to his feud with JPMorgan Chase & Co. “JP Morgan hates Tesla, in a nutshell,” Mr. Musk said, adding that the rift dates back years to when the bank declined to back Tesla’s automotive-leasing effort.

J.P. Morgan declined to comment.

Write to Rebecca Elliott at rebecca.elliott@wsj.com and Meghan Bobrowsky at meghan.bobrowsky@wsj.com

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