During his testimony, Musk stated that he believed he had sufficient financial backing to take Tesla private, both from Saudi Arabia’s sovereign wealth fund and his own stake in SpaceX. He claimed that he had a verbal agreement with the Public Investment Fund (PIF) of Saudi Arabia, and that they had expressed their willingness to support a possible attempt to take Tesla private at $420 per share, a premium of roughly 20 percent at the time. However, he acknowledged that there was no official contract in place and that many details had not been worked out.Musk also stated that PIF had “many multiples” of what was required to take Tesla private, and added that his own shares in SpaceX would be enough to make up for any shortfall. “It’s important for the jury to know that,” he said.
The investors who filed the lawsuit claim that Musk artificially boosted Tesla’s stock price when he wrote the tweets, and that ultimately caused them significant financial losses as the shares fluctuated in response. Musk, however, argued that his posts were based on conversations with backers from PIF and what he considered a “handshake” agreement to take the company off the public markets.
When pressed about the likely reaction to the tweet, Musk told the court that it was “difficult to predict” if Tesla shares would rise or fall as markets can act in “unexpected” ways. He acknowledged that the stock price would likely jump, but emphasised that the tweet said he was “considering” taking Tesla private and should not have been taken as a definitive agreement.
During the trial, the legal team representing the shareholders attempted to present the tweet from Musk as a casual suggestion, rather than a serious proposal. They even suggested that the $420 price point may have been chosen because it is a slang term for cannabis, and that it was a joke shared with his then-girlfriend. However, Musk denied this and clarified that the price was based on a 20% premium on the stock, with a slight rounding up.