A trial over a controversial tweet by Elon Musk in 2018 was making headlines this week. Musk shared more details on why he shared the tweet and why it was important to take electric vehicle company Tesla Inc TSLA private.
What Happened: In 2018, Elon Musk tweeted he was taking Tesla private at $420 per share and had secured funding. The tweet was the subject of an ongoing trial to determine if Musk had secured funding or was inflating the share price of Tesla.
While testifying under oath, Tesla CEO Musk said Alphabet Inc GOOGGOOGL had “standing interest” in buying the electric vehicle company. Musk said Alphabet’s interest in buying Tesla factored into his decision to line up funding for taking Tesla private, according to Marketwatch.
Musk also testified he had lined up funding from Saudi Arabia’s sovereign wealth fund, the Public Investment Fund. The Tesla CEO said he met with representatives of the fund at Tesla’s factory in Fremont, California, in July 2018.
“PIF unequivocally wanted to take Tesla private,” Musk said as part of his testimony.
A 2015 book highlighted a potential deal between Tesla and Google co-founder Larry Page for $11 billion, according to Business Insider. The deal would have seen Musk sell Tesla to Google in 2013, but the deal fell through over specifics of the deal.
Google co-founder Sergey Brin was an early investor in Tesla with an unknown amount invested in the company prior to its IPO. Reports said Brin invested in Tesla in 2006 and also during the 2008-2009 financial crisis when Tesla struggled.
Reports indicated Brin wanted to sell his shares last year after a report Musk had an affair with his wife was made public. Musk denied the affair took place.
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Why It’s Important: The lawsuit alleged Musk had not secured funding to take Tesla private and tweeted to help boost the share price of the stock instead.
Musk said during the trial testimony that a takeover price had not been discussed with the Public Investment Fund. Musk’s tweet said the buyout would be at $420 per share.
While 420 was one of the often-used and favorite numbers of Musk, the Tesla CEO said the price was not a joke and rather “was a 20% premium over the stock price.”
With Brin already owning a small stake in Tesla, there could be truth to the matter of Alphabet being interested in the company. Filings don’t list Brin, indicating he never owned more than 5% of Tesla.
The trial is expected to go until early February and Musk has to prove he had funding secured in order to send the tweet.
Musk’s comments about Alphabet being interested in buying the company may answer why he wanted to take the company private to keep control and remain CEO of the company.
TSLA Price Action: Tesla shares are trading slightly down at $143.29 on Tuesday. Shares of the electric vehicle company are up 33% in 2023 after falling over 50% in 2022.
Photo: FellowNeko via Shutterstock
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