SAN FRANCISCO (AP) \u2014 Elon Musk\u2019s\u00a0enigmatic personality and unconventional tactics\u00a0are emerging as key exhibits in a trial revolving around one of his most polarizing pursuits \u2014 tweeting.<\/p>\n\n\n\n
The trial, centered on a pair of tweets announcing Musk had obtained the money to take Tesla private in 2018, reeled the 51-year-old billionaire into a federal courtroom in San Francisco for three days of testimony that opened a peephole into his often inscrutable mind.<\/p>\n\n\n\n
Musk, who\u00a0now owns the Twitter service\u00a0that he deploys as his megaphone, was often a study in contrasts during his roughly eight hours on the stand. The CEO of the electric carmaker is facing a class-action lawsuit filed on behalf of Tesla shareholders after Musk tweeted about a company buyout that didn\u2019t happen.<\/p>\n\n\n\n
Through both\u00a0his testimony\u00a0and the evidence submitted around it, Musk came across as impetuous, brash, combative and contemptuous of anyone who questioned his motives as a game-changing entrepreneur who has inspired comparisons to Apple\u2019s late co-founder, Steve Jobs.<\/p>\n\n\n\n
At other times, Musk sounded like the savvy visionary that his supporters hail him to be \u2014 an intrepid rebel who by his own estimates has raised more than $100 billion from investors. They have been richly rewarded from his leadership of pioneering companies that include PayPal in digital payments, Tesla in electric vehicles and SpaceX in rocket ships.<\/p>\n\n\n\n
\u201cIt is relatively easy for me to get investment support because my track record is extremely good,\u201d Musk wryly observed.<\/p>\n\n\n\n
But his\u00a0confidence in his ability\u00a0to get the money he wants to pursue his plans is one reason he\u00a0found himself in court. The three-week trial is set to resume Tuesday and head for jury deliberations by Friday.<\/p>\n\n\n\n
Here\u2019s what to know so far:<\/p>\n\n\n\n
PLANTING THE SEEDS<\/p>\n\n\n\n
Evidence and testimony have shown Musk had started to mull taking Tesla private in 2017 so he wouldn\u2019t have to hassle with the headaches and distractions that accompany running a publicly traded company.<\/p>\n\n\n\n
After a July 31, 2018, meeting with a top representative from Saudi Arabia\u2019s sovereign wealth fund, Musk sent a letter to Tesla\u2019s board outlining why he wanted to take the automaker private at a price of $420 per share \u2014 about 20% above its stock price at the time.<\/p>\n\n\n\n
Musk was serious enough that he had already discussed the pros and cons with Michael Dell, who had gone through the public-to-private transition in 2013 when he led a $25 billion buyout of the personal computer company bearing his name, according to trial evidence.<\/p>\n\n\n\n
THE TROUBLESOME TWEETS<\/p>\n\n\n\n
The crux of the case hinges on an Aug. 7, 2018, tweet in which Musk declared\u00a0\u201cfunding secured\u201d\u00a0to take Tesla private. Musk abruptly posted the tweet minutes before boarding his private jet after being alerted that the Financial Times was about to\u00a0publish a story\u00a0that Saudi Arabia\u2019s Public Investment Fund had spent about $2 billion buying a 5% stake in Tesla to diversify its interests beyond oil, according to his testimony.<\/p>\n\n\n\n
Amid widespread confusion about whether Musk\u2019s Twitter account had been hacked or he was joking, Musk followed up a few hours later with\u00a0another tweet\u00a0suggesting a deal was imminent.<\/p>\n\n\n\n
Musk\u00a0defended the initial tweet\u00a0as a well-intentioned move to ensure all Tesla investors knew the automaker might be on its way to ending its then-eight-year run as a publicly held company.<\/p>\n\n\n\n
\u201cI had no ill motive,\u201d Musk testified. \u201cMy intent was to do the right thing for all shareholders.\u201d<\/p>\n\n\n\n
Guhan Subramanian, a Harvard University business and law professor hired as an expert for shareholder lawyers, derided Musk\u2019s method for announcing a potential buyout as an \u201cextreme outlier\u201d fraught with potential conflicts.<\/p>\n\n\n\n
\u201cThe risk is that Mr. Musk timed his announcement of his (management buyout) proposal to serve his own interests rather then the interests of the company,\u201d Subramanian testified.<\/p>\n\n\n\n
WHERE\u2019S THE MONEY?<\/p>\n\n\n\n
There\u2019s another issue threatening to undermine Musk\u2019s defense. He hadn\u2019t locked up the financing for his proposed deal or even pinned down down how much would be needed to pull it off, based on testimony from Musk, other witnesses and other evidence.<\/p>\n\n\n\n
That is one reason U.S. District Judge Edward Chen had decided last year that Musk\u2019s 2018\u00a0tweets were false\u00a0and has instructed the jury to view them that way.<\/p>\n\n\n\n
It also prompted regulators to allege Musk misled investors with the tweets, resulting in a\u00a0$40 million settlement\u00a0with the U.S. Securities and Exchange Commission that also required Musk to step down as Tesla\u2019s chairman.<\/p>\n\n\n\n
Chen ruled that the 2018 settlement, in which Musk didn\u2019t acknowledge wrongdoing and has since lamented making, can\u2019t be mentioned to the jury.<\/p>\n\n\n\n
Musk testified that he believed he had secured an oral commitment to provide wherever money was needed for a Tesla buyout during a July 31, 2018, face-to-face meeting with Yasir al-Rumayyan, governor of Saudi Arabia\u2019s wealth fund.<\/p>\n\n\n\n
That was reinforced in testimony from Tesla\u2019s former chief financial officer, Deepak Ahuja, who was at the discussions and took al-Rumayyan on a half-hour tour of a Tesla factory.<\/p>\n\n\n\n
But a text message al-Rumayyan sent to Musk after the \u201cfunding secured\u201d tweets made it appear that the discussions about the Saudi fund financing a private buyout were preliminary.<\/p>\n\n\n\n
\u201cI would like to listen to your plan Elon and what are the financial calculations to take it,\u201d al-Rumayyan wrote to Musk, according to a copy submitted as evidence in the trial.<\/p>\n\n\n\n
Musk framed al-Rumayyan\u2019s text as an attempt to backpedal from his previous commitment. He also insisted the Saudi fund had given an \u201cunequivocal commitment\u201d to financing the buyout.<\/p>\n\n\n\n
MONEY MANEUVERING<\/p>\n\n\n\n
After his 2018 tweets, Musk tried to get the money needed for the Tesla buyout with the help of Egon Durban, co-CEO of the private equity firm Silver Lake, which helped finance the Dell buyout in 2013. Musk also enlisted Dan Dees, a top executive with Goldman Sachs, an investment banking firm that had worked closely with Tesla.<\/p>\n\n\n\n
In testimony, both Durban and Dees discussed efforts to raise money for a Tesla buyout for a wide range of potential investors that included two Chinese companies, Alibaba and Tencent, as well as Google in documents initially code-named \u201cProject Turbo,\u201d then \u201cProject Titanium.\u201d<\/p>\n\n\n\n
The buyout would have required anywhere from $20 billion to $70 billion, according to the documents \u2014 funding that never came close to getting raised, Durban and Dees both testified, largely because Musk scrapped the proposal to take Tesla private on Aug. 24, 2018, after consulting with shareholders.<\/p>\n\n\n\n
Tesla\u2019s shares are now worth eight times what they were then, after adjusting for two stock splits.<\/p>\n\n\n\n
Musk still contends he could have gotten the money had he wanted and, even if there was a shortfall, he could have covered any gap by selling some of his stock in privately held SpaceX. That is a strategy Musk used in his $44 billion purchase of Twitter, except he\u00a0sold about $23 billion of his stock in Tesla.<\/p>\n\n\n\n
Durban and Dees both testified that they had no doubt the money for a buyout could have been raised \u2014 echoed by former Tesla director Antonio Gracias.<\/p>\n\n\n\n
\u201cHe is the Michael Jordan of fundraising,\u201d Gracias testified.<\/p>\n","protected":false},"excerpt":{"rendered":"
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