According to a federal court filing filed late Tuesday in California, Elon Musk maintains that his now-famous tweet saying that Saudi Arabia had agreed to finance a 2018 takeover of Tesla was “fully factual,” fighting back against investors who allege it was a fraud.
Musk sets out his version of events leading up to his Aug. 7, 2018, tweet that created a social media firestorm — and a knock on the knuckles from federal regulators — in full for the first time in a late Tuesday filing in the US District of Northern California:
“At $420, I am contemplating taking Tesla private.” Musk tweeted that day, “Funding secured.”
Musk was charged with fraud by the Securities and Exchange Commission for his tweet, which resulted in a $40 million punishment for Musk and his business, his resignation as chairman of Tesla, and a requirement that his tweets be approved by company attorneys. Meanwhile, Tesla investors launched a California class-action lawsuit when their shares soared approximately 13% after the tweet but subsequently plummeted. A summary judgment is what they are wanting.
According to the court document submitted by Quinn Emanuel Attorney Alex Spiro, Musk now claims in response to the class-action complaint that he had funds secured for a plan to take Tesla private and hence could not have deceived investors.
In the lawsuit, Musk’s attorney Alex Spiro said, “Elon Musk’s August 7, 2018 tweet telling the world that he was contemplating taking Tesla private was totally honest.” “Mr. Musk was thinking about taking Tesla private for $420 a share.” A source of funding has been found. Investors were on board.”
“When Mr. Musk tweeted, he truly thought financing was secured,” Spiro stated in the lawsuit. “It was obtained, according to Mr. Musk’s conversations with the Saudi Arabia sovereign fund.”
The document received by The Washington Post on Tuesday is heavily redacted. Late Tuesday, the Saudi Arabia Public Investment Fund could not be contacted.
Musk’s lawyers allege in the lawsuit that he also contacted the Tesla board before the tweet with a $420-a-share offer, a 20% premium to where the stock was trading that day in 2018. Musk allegedly had his own financial and legal consultants working on a transaction, according to the lawsuit. The court motion redacts the identities of the accused advisors.
On August 7, 2018, the Financial Times reported that Saudi Arabia has purchased a roughly 5% stake in Tesla. On the same day, Musk sent out his now-famous $420 tweet. In early 2020, the Saudi fund announced that it has sold virtually all of its Tesla stock.