Musk did not need Tesla board to review buyout tweets, directors testify

• Published date: 02 February 2023
• Publication title: Malay Mail Online

Tesla Inc's board had no obligation to review CEO Elon Musk's 2018 tweets announcing a bid to take the electric car maker private, which investors allege were fraudulent, two independent directors testified at trial yesterday.

Musk's August 7, 2018 tweets sent Tesla stock soaring and after they fell back down, shareholders sued, alleging they lost money. But board members James Murdoch and Ira Ehrenpreis each said the tweets did not need to be vetted by the company before Musk sent them because he had done so in his individual capacity.

Their testimony concluded live witnesses in the trial, which began in San Francisco federal court on Jan. 17.

Musk tweeted that he had 'funding secured' to take the carmaker private at a US$420 (RM1,777) per share price, a premium of about 23 per cent to the prior day's close. The stock price soared after the tweet and then fell as it became clear the buyout would not happen. Tesla shareholders say they lost billions of dollars on their investments in stocks and other securities of the company.

The trial is testing whether Elon Musk, the world's second-richest person, can be held liable when his sometimes impulsive use of Twitter rubs up against US Securities and Exchange Commission rules about corporate disclosures.

The two board members are named as defendants in the lawsuit. Their attorneys, who also represent Musk and Tesla, have asked the judge overseeing...