Elon Musk's Tweet Trial Holds Many Wins
The timing is nearly as significant as the ultimate result.
(Photo by Dimitrios Kambouris/Getty Images for The Met Museum/Vogue)
If you are reading this, odds are you are a prolific consumer of news and information. That being the case, consider what you have heard about Elon Musk over the last several weeks.
Prior to the end of his latest trial on Friday, February 3, probably what you heard about Elon Musk was nothing. There has recently been a merciful silence when it comes to major Elon Musk news.
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Even so, we are not very far removed from a very tumultuous period for Musk, as controversy after controversy sprang forth from his purchase and then management of Twitter. It was only December when he was up on stage with Dave Chappelle getting booed.
It seems that staying out of the headlines is a good thing for Elon Musk. Electric automaker Tesla, which Musk runs as CEO and which accounts for a substantial portion of Musk’s wealth, has thrived during Musk’s absence from the spotlight. A share of Tesla stock cost $108.10 at the beginning of January — the lowest price in years. By the close of trading on February 3, Tesla’s stock price had risen to $189.98.
A lot of factors go into the share price of any company’s stock, and it is impossible to prove which of them accounts for the majority of the ups and downs of the market. Still, it is difficult to imagine that Musk’s muted media presence for a period of weeks recently was not better for the Tesla share price than were the preceding months of increasingly unpopular and outlandish remarks.
Elon Musk always needs a project. Some commentators might say it’s more like Elon Musk always needs a disaster — and if one does not readily present itself, he will cheerfully create it.
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This is, perhaps, not so surprising. It took someone unusual to rouse the electric automobile industry from its century-long slumber, to achieve first after first in the history of private spaceflight, and to become the world’s richest person (even temporarily).
Musk has repeatedly demonstrated through his multitude of companies that, applied to the right challenge, his drive can help accomplish seemingly miraculous things. Sometimes his aim is off though.
Musk’s most recent distraction has been a two-and-a-half week long trial over his now infamous 2018 tweet regarding supposedly having funding secured at a share price of $420 to bring Tesla private. Funding was not, in fact, secured, and Tesla never went private.
Investors sued — well, some investors, I’m a Tesla investor myself and couldn’t care less about the fact that Musk imprudently tweeted about funding being secured at $420 per share — claiming that the ill-conceived tweet cost them billions of dollars. Personally, this strikes me as a poor justification for a lawsuit. If you really bet billions based solely on a dumb-on-its-face Elon Musk tweet, you are probably not a great investor and are bound to lose your money one way or another.
My opinion notwithstanding, fallout from the $420 funding secured tweet has stuck to Musk for years. He already paid a fairly large fine to the SEC over the tweet (by agreement), but the agency nonetheless has seemed hellbent on dogging Elon Musk ever after.
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Maybe the history of the 2018 tweet accounted for Musk’s particular interest in this trial. Someone like Elon Musk is inevitably drawn into the legal system from time to time. Yet in previous cases he has not always stuck around for the parts of the proceedings when his presence was not strictly required. This time, Musk was present throughout closing arguments.
The jurors reached a verdict in less than two hours. They unanimously cleared Musk of wrongdoing in relation to the $420 funding secured tweet.
The timing is nearly as significant as the ultimate result. A verdict within two hours when the trial spanned nearly three weeks means there was very little doubt in any of the juror’s minds. The result of this trial will serve as a powerful message to the SEC and anyone else who may entertain thoughts of further legal action related to Musk’s tweets.
With no looming trial to worry about, with no testimony to prepare for, Elon Musk is now going to need a new project. Let us hope it’s something more productive this time than falling down social media rabbit holes or exploring the fringes of American politics.
Jonathan Wolf is a civil litigator and author of Your Debt-Free JD (affiliate link). He has taught legal writing, written for a wide variety of publications, and made it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at jon_wolf@hotmail.com.
