Elon Musk Justifies His 2018 Tweet, Claims Tesla Had Funds To Go Private

Elon Musk was On the witness stand on Monday, defending his 2018 tweet about taking Tesla private.

Musk supported his claim with a bizarre real estate analogy.

According to Musk, "if a bank tells you they’ll support your desire to buy a house, and you then agree to buy a house, the bank will give you a mortgage as a matter of course. “You still do that paperwork to do the transaction, but the transaction will go through,” he said in court at his fraud trial.

The attorney representing investors who say Musk defrauded them found Musk’s analogy amusing.

You may be able to buy a house without having a written commitment from a bank, but the rest of us understand you need a written commitment from the bank before you start making offers", plaintiff’s attorney Nicholas Porritt said.

Musk quickly dropped the analogy.

“That’s not how things work with a sovereign investment fund,” he said. He then moved on to other explanations for having used the words “funding secured” in an Aug. 7, 2018, tweet about a take-Tesla-private deal that never happened.

According to Musk, the funding was to come from Saudi Arabia’s Public Investment Fund.

Musk testified that an earlier agreement that involved a Saudi purchase of 5% of Tesla stock was struck as a "handshake deal."

Musk had been discussing the take-private deal with Saudi investment fund head Yasir Al-Rumayyan in 2018, a week before his tweet.

Yet, in his testimony Monday, Musk acknowledged no financial terms were agreed to. Musk said in court that Al-Rumayyan “did not stick to his word.”

Investors claim they lost big money as the stock’s market value whipsawed in response, by billions of dollars after the tweet.

Four years ago, Musk signed a settlement with federal securities regulators in the wake of the tweet. Under that deal, the U.S. Securities and Exchange Commission can’t call Musk a fraud, and Musk can’t say he was acquitted of fraud charges.

Musk returns to the witness stand on Tuesday.

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