Elon Musk Heads to Court to Battle Tesla Shareholders over Infamous 'Funding Secured' Tweet

Tesla CEO and new Twitter owner Elon Musk is set to return to court this week for a legal battle with angry Tesla shareholders who claim his infamous 2018 “funding secured” tweet cost them huge amounts of money.

The New York Post reports that Tesla CEO Elon Musk will be appearing in court this week over a class-action lawsuit by Tesla shareholders who claim that Musk’s infamous 2018 “funding secured” tweet affected them financially. The lawsuit began Tuesday with jury selection in San Francisco federal court.

Elon Musk, chief executive officer of Tesla Inc., speaks via video link during the Qatar Economic Forum in Doha, Qatar, on Tuesday, June 21, 2022. Photographer: Christopher Pike/Bloomberg

Musk is expected to take the stand as the star witness during court proceedings. Tesla shareholders are seeking unspecified financial damages, alleging that Musk caused billions of dollars in loss with his August 7, 2018 tweet in which he stated that he had “funding secured” to take Tesla private at $420 per share. The deal Musk claimed to have secured never went ahead, if it even existed at all.

Musk is at a disadvantage in the trial as the judge presiding over the case, District Court Judge Edward Chen, previously ruled in April 2020 that Musk’s tweets on the subject were “false and misleading” and that he acted “recklessly given his clear knowledge of the discussions.”

Chen further ruled that there was “nothing concrete” to back up Musk’s claims that he had reached an agreement with Saudi Arabia’s Public Investment Fund at the time of the tweet. Musk denies any wrongdoing and claims to have engaged in discussions with potential investors on the deal.

Jurors will determine whether Musk’s actions caused direct financial harm, meaning Musk may be obligated to pay impacted shareholders. Last week, Judge Chen shut down efforts by Musk’s attorney to move the trial’s venue from San Francisco to a federal court in Texas. Musk’s team alleged that the possible jury pool in the city was biased due to the recent responses to Musk’s $44 billion takeover of Twitter.

Attorneys for the Tesla shareholders opposed the transfer request, stating that Musk was a “celebrity” whose actions draw intense scrutiny regardless of location. In a court filing, the shareholders’ attorneys said: “For better or worse, Musk is a celebrity who garners attention from the media around the globe. His footprint on Twitter alone is partially to blame for that. If ‘negative’ attention was all that was required to disqualify a jury pool, Musk would effectively be untriable before a jury given his knack for attracting ’negative” coverage.”