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Elon Musk on Saudi ‘ass-covering’ and 8 other things the Tesla boss said to defend himself in the ‘funding secured’ trial

Tesla CEO Elon Musk is questioned by the investors' attorney Nicholas Porritt during a securities-fraud trial at federal court in San Francisco, California, U.S., January 23, 2023 in this courtroom sketch. REUTERS/Vicki BehringerA courtroom sketch shows Tesla CEO Elon Musk testifying on Monday.

Vicki Behringer/Reuters

  • Elon Musk testified Monday in trial sparked by shareholder allegations the Tesla CEO committed securities fraud.
  • He said Saudi investors sent “ass-covering” texts and he planned to sell SpaceX stock to take Tesla private.
  • Here are 9 things we’ve learned about Musk and the “funding secured” tweet at the heart of the lawsuit.

Elon Musk took the stand again Monday to defend himself in an ongoing trial sparked by a class-action shareholder lawsuit that alleges the Tesla CEO committed securities fraud.

Investors suing Musk have accused the world’s second-richest man of illegally manipulating Tesla‘s stock price in 2018 when he tweeted he had “funding secured” to take the company private at $420 a share.

Here are nine things we’ve learned from the San Francisco trial, from Musk’s testimony so far.

Musk thought a handshake deal meant Saudi Arabia’s sovereign wealth fund would back taking Tesla private

Yasir Al-Rumayyan, who is the governor of Saudi Arabia’s $620 billion wealth fund, is a central figure in the ongoing trial. Musk thought a handshake with Al-Rumayyan meant the Saudi fund was willing to give him the necessary backing to take Tesla private, he told the court Monday.

“A signed document is neither here nor there,” he said. “If they say they’re going to do something, they do it.”

Musk described Al-Rumayyan as “ass-covering” in later texts backpedaling on the move

Private texts disclosed in previous court filings show Musk slamming Al-Rumayyan for backing away from the deal. The Tesla boss described the PIF governor saying there had been no signed deal as “ass-covering, for lack of a better word“.

Musk planned to sell SpaceX stock when he said he had “funding secured”

The Tesla CEO said he counted on selling stock in the space technology company to take the carmaker private in 2018. He compared the potential sale to his recent offloading of Tesla shares to fund his $44 billion deal to buy Twitter.

“SpaceX stock alone meant ‘funding secured’ by itself,” he told lawyers in cross-examination Monday. “It’s not that I want to sell SpaceX stock, but I could have, and if you look at the Twitter transaction — that is what I did.”

Google wanted to purchase Tesla

Tech giant Google had previously had a “standing interest” in buying the electric-vehicle maker, which encouraged him to try taking the company private with Saudi funds, Musk testified. He pointed to the interest from Google’s parent Alphabet laid down in an earlier deposition.

There’s a reason Musk wanted to take Tesla private at $420 a share

The $420 price wasn’t a marijuana reference meant for entertain his then-girlfriend Grimes, Musk said, but a 20% premium on Tesla’s stock at the time. But he did say the number has some significance.

“There is some, I think, karma around 420,” he told the court. “I should question whether that is good or bad karma at this point.”

Musk sought out advice from Dell’s founder as he considered selling Tesla

Michael Dell, who took his own tech company private in 2013, was “unequivocal” that privatizing Tesla was a good idea, according to Musk. He also said he’d discussed the buyout at a dinner with Oracle co-founder Larry Ellison in 2017.

Musk really dislikes short-sellers

In testimony on Friday, the billionaire called for a ban on short-selling, which is when investors make a bet that an asset will fall to a lower price.

“I believe short-selling should be made illegal,” he said. “It is a means for, in my opinion, bad people on Wall Street to steal money from small investors. Not good.”

Musk doesn’t think Tesla shareholders want him to leave Twitter

In October 2018, billionaire Tesla shareholder Ron Baron said investors would benefit from Musk tweeting less. Musk said that referenced his string of controversial comments on current affairs, rather than tweets about Tesla itself.  

“He’s not saying ‘don’t use Twitter’,” Musk said Friday. “He’s saying I shouldn’t respond to criticism in the news on Twitter.”

But Musk doesn’t believe his own tweets ever affect Tesla’s share price: Musk is one of the most active CEOs on Twitter – and in October he took the social-media company private in a chaotic takeover deal. But he doesn’t believe that his tweets actually move markets.

“Just because I tweet something does not mean people believe it or will act accordingly,” he said Friday.

Read the original article on Business Insider