Elon Musk Says ‘Funding Secured’ Has No Universal Meaning
Elon Musk Says ‘Funding Secured’ Has No Universal Meaning
(Bloomberg) -- Tesla Inc. Chief Executive Officer Elon Musk argued that “funding secured” has no universal meaning as he seeks to throw out an investor lawsuit over a tweet last year in which he said he was considering taking the company private.
Contrary to investors who claim the Aug. 7, 2018, tweet was an act of fraud that cost them hundreds of millions of dollars, Tesla and Musk said Friday in a request to dismiss the case that his actual words -- “Am considering taking Tesla private at $420. Funding secured” -- were neither false or misleading.
“The only reasonable interpretation of Mr. Musk’s ‘funding secured’ statement on August 7 -- which mirrors precisely what he told the board days earlier -- is that funding would be no obstacle if he decided to proceed with a transaction,” according to his filing in San Francisco federal court. “It was not false on August 7, when he publicly stated that funding was no impediment. And it was not false in hindsight.”
The investors who sued try to read something altogether different in the phrase so that anything short of a formal agreement with specific terms would render it misleading, according to the filing.
“While the tweet conveyed his belief that funding would be available, that is a far cry from saying that ‘formal documentation’ setting forth ‘all deal terms’ with financing parties was in place,” Musk and the company said.
The tweet landed Musk in trouble with the U.S. Securities and Exchange Commission and he had to agree that Tesla’s lawyers will review his Twitter posts that may have a material impact on the carmaker.
The case is In re. Tesla Inc. securities litigation, 18-cv-04865, U.S. District Court, Northern District of California (San Francisco).
To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net
To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Peter Blumberg, Joe Schneider
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