Elon Musk wins Tesla shareholder lawsuit over 2018 ‘funding secured’ tweet
Scott Olson

A San Francisco jury ruled Friday in Tesla founder Elon Muskâs favor in a class-action shareholder lawsuit over his 2018 âfunding securedâ tweet, in which the entrepreneur questionably claimed to have financing lined up to take Tesla (NASDAQ:TSLA) private.
âThank goodness, the wisdom of the people has prevailed!â Musk tweeted Friday after jurors in a federal civil trial found on his behalf. âI am deeply appreciative of the juryâs unanimous finding of innocence in the Tesla 420 take-private case.â
Class-action lawyers representing shareholders of Tesla (TSLA) sued over an Aug. 7, 2018, tweet in which Musk wrote: "Am considering taking Tesla private at $420. Funding secured."
The tweet sent TSLA soaring 11% to as high as $387.46 that day, although the stock failed to reach $420 as the take-private idea foundered. It also turned out that while Musk had talked to Saudi investors about providing financing for a take-private deal, such funding arguably wasnât truly âsecured.â
TSLA stock eventually sank as much as some 35% intraday a month after Muskâs tweet, and the take-private deal never went forward.
Lawyers representing shareholders claimed that Musk unfairly sent TSLAâs stock price higher by overstating how solid the dealâs financing was. Had they prevailed, a court could have ordered Musk to pay billions of dollars in damages.
The U.S. Securities and Exchange Commission also previously sued Musk over the incident, reaching an out-of-court settlement in which he and Tesla (TSLA) each paid $20M and Musk gave up his chairmanship of the EV maker. Fridayâs jury verdict came in an unrelated case brought on behalf of individual stockholders.
Musk last month testified in his own defense at the San Francisco trial, saying that the Saudi investors he spoke with "unequivocally" wanted to help take the company private.
And while Tesla (TSLA) originally fell when the take-private deal came apart, the stock later began a multi-year rally. In November 2021, TSLA peaked some 1,500% above its Aug. 7, 2018, high after factoring in stock splits.
Even with TSLAâs big pullback over the past year, the stockâs close Friday at $189.98 represents a more than 635% gain from its Aug. 7, 2018, intraday peak after taking stock splits into account.
Seeking Alpha contributors are divided on where Tesla (TSLA) goes from here. Columnist Alpha Investment Research recently laid out a âBuyâ case for the stock, while contributor Sean Chandler gave TSLA a âSellâ rating.