Unsurprisingly, it was a tweet that caused the most recent troubles for Elon Musk.
On August 7, 2018, Musk tweeted “Am considering taking Tesla private at $420. Funding secured.” The ‘420’ is a weed joke, considered to be the right time of the afternoon to light a joint, and a meme Musk had recently discovered.
The man who would later buy Twitter for $44 billion and call himself “chief twit” later added: “Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote.”
As expected, Tesla’s share price surged for three weeks, then crashed when the deal didn’t materialise.
The class action lawsuit alleged that “Musk rounded the price up to $420 per share because he thought his girlfriend at the time, Claire Elise Boucher (also known as “Grimes”), would find it funny due to the significance of the number to marijuana users”.
Astonishingly for Musk, the presiding judge had already found that the second tweet and Musk’s initial insistence about “funding secured” were false. And yet he won.
Amazingly, despite Judge Edward Chen telling the nine-person jury that Musk’s tweets were “untrue” and he “acted with reckless disregard for whether the statements were true,” they found in his favour.
In his April 2022 ruling, Chen found that “no reasonable jury could find the statement ‘funding secured’ accurate and not misleading” as the “evidence shows that there was nothing concrete about funding coming from the PIF”. The Public Investment Fund is the Saudi Arabian government’s, well, investment fund.
These were “clearly at the preliminary stage. There had been no discussion about what the purchase price would be for a share of stock. Nor had there been any discussion about what percentage of the company the PIF would own or the total amount of money the PIF would contribute,” Chen wrote.
And yet the jury sided with Musk.
Listen: Author Michael Vlismas on writing Elon Musk’s new biography – T2S2
It seemed impossible for Musk to win this class action suit by investors who claim they lost $12 billion because of the tweets. University of Iowa College of Law professor Robert Miller told tech publication Ars Technica in January that “Elon’s going to lose, and he’s going to lose for a significant amount. We’re just talking about exactly how much”.
After the jury found for Musk, University of Michigan law professor Adam Pritchard told The New York Times that “I thought he was crazy to try his chances at trial, given the stakes involved” referring to Chen’s ruling. “You’re fighting with one hand behind your back in that situation — and yet he won.”
Musk made his own thanks, on Twitter obviously. “Thank goodness, the wisdom of the people has prevailed!” he tweeted. “I am deeply appreciative of the jury’s unanimous finding of innocence in the Tesla 420 take-private case.”
This is not the first time Musk won an improbable court case of a “reckless” tweet. During the 2018 Thai cave rescue of a team of teenage footballers caught in a flash flood, Musk called cave diver Vernon Unsworth a “pedo guy”.
During his testimony, Musk claimed it was a phrase he learnt growing up in South Africa. Have you ever heard of it?
He testified that “pedo guy” is used in other countries also. It’s quite common in the English-speaking world. I’m quite confident if you do a search, it will just say ‘creepy old dude’.
In this latest Tesla verdict, the jury took just two hours to rule for the South African – despite being told by the presiding judge that the tweets were “untrue” and “reckless”.
The jury foreperson’s Robin Cadogan “said he wasn’t persuaded by arguments that the tweets were material,” the Wall Street Journal reported. “The overall message, it just didn’t land,” he said. “There was nothing there to give me an ‘aha’ moment.”
Astounding. The mantle of Steve Job’s famed reality distortion field has truly passed over to Pretoria’s most famous son.
- This article first appeared on the Daily Maverick.