Elon Musk testified in court that at the time he sent out a contentious tweet, he thought he had the support necessary to take Tesla private.
After investors claimed the 2018 tweet cost them millions of dollars after a deal fell through, the CEO of the electric car firm is currently on trial.
According to Mr. Musk, a Saudi Arabian sovereign wealth fund told him they would back a deal during their meeting.
He said that if he needed money, he would have sold his shares in the rocket company SpaceX.
After tweeting on August 7, 2018, that he had “funding secured” to take Tesla private at $420 per share, and that “investor support is confirmed,” Mr. Musk is accused of misleading investors.
The post caused a strong backlash against the entrepreneur and drove Tesla shares skyrocketing, but a few weeks later they dropped back when Mr. Musk announced the idea was no longer moving forward.
The US regulator, the Securities and Exchange Commission, made him resign from his position as chairman of Tesla, and any tweets about Tesla had to be approved by a separate panel.
In addition, he and Tesla paid $20 million in fines to resolve an SEC complaint that he had engaged in securities fraud.
On Monday, Mr. Musk testified in court in San Francisco that he had a meeting with representatives of the Public Investment Fund of Saudi Arabia on July 31, 2018.
He asserted that the fund officials made it apparent they supported a transaction, even though a price for taking Tesla private was not addressed.
Yasir Al-Rumayyan, the fund’s governor, allegedly appeared to renege on his promise after that, according to Mr. Musk.
“I was very upset because he had been unequivocal in his support for taking Tesla private when we met and now he appeared to be backpedaling,” he said.
In addition, Mr. Musk was asked how he arrived at the $420 per share pricing and whether it was a reference to marijuana.
In 2018, the SEC reported that Mr. Musk had computed the price by using the share price of Tesla on a specific day and adding a 20% premium. That calculation resulted in a price of $419.
But in accordance with the legal records of the SEC: “He rounded the price up to $420 because he had recently learned about the number’s significance in marijuana culture and thought his girlfriend ‘would find it funny, which admittedly is not a great reason to pick a price’.”
