Tesla Inc‘s TSLA board of directors was not obligated to review CEO Elon Musk’s 2018 tweet in which he said he was taking the automaker private, according to the testimony of two directors at a trial brought by investors who allege fraud.
What Happened: The two board members, named defendants in the lawsuit, have asked the judge in the case to dismiss allegations against them and other board members saying investors have not proven that they are liable, reported Reuters.
James Murdoch, the son of media entrepreneur Rupert Murdoch, reportedly testified that the tweets were in line with what he knew about Musk’s negotiations with Saudi Arabia’s sovereign wealth fund, the Public Investment Fund.
Musk’s infamous tweet from August 2018, where he said “funding secured” sent Tesla stock soaring, and after they fell subsequently, shareholders sued, claiming they lost money.
“They had great confidence in the availability of funding for such a transaction,” said Murdoch pointing to Musk and the erstwhile Tesla CFO Deepak Ahuja.
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Why It Matters: Other board members include Musk’s brother Kimbal Musk, noted Reuters.
Last week, Musk testified that he could have sold his stake in his rocket company, SpaceX, to take Tesla private.
Musk said that PIF governor, Yasir Al-Rumayyan, retracted his commitment to take Tesla private. He said that this made him very upset.
Price Action: On Wednesday, Tesla shares closed 4.7% higher at $181.41 and gained 1.4% to $183.99 in the after-hours trading, according to Benzinga Pro data.