OPINION: Tesla CEO claims to be the champion of retail investors while being sued by them, says he thought taking Tesla private would be like buying a house, and insists he should still be trusted — will a jury still believe him?
San Francisco has been home in recent days to an upside-down world of contrasts where one of the world’s richest men, Elon Musk, enters a federal courtroom with four security staff in tow to portray himself as an advocate for the average retail investor who has never lost money for his investors.
“I believe short selling should be made illegal,” he said Friday. “It is a means…for bad people to steal money from small investors.” “Taking a company private is different than buying shares in the open market,” said attorney Nicholas Porritt, the plaintiffs’s counsel. “It’s not significantly different, ” Musk said. “It’s not?” Porritt asked. “I don’t think so,” Musk replied.
“It is like buying a house,” Musk offered during while being questioned by plaintiff’s counsel. “PIF [the Saudi Public Investment Fund] is like the bank, saying they will support you. There is still documentation after you agree to buy a house, but you are still going through with it.” When Porritt pointed out that when he bought a house he had to get a written commitment from a bank before even making an offer, Musk said that was not how things worked with the sovereign investment fund.
In Musk’s alternate universe, ARK Invest, which has about $16 billion of assets under management in several ETFs, like the ARK Innovation Fund ARKK, -1.58%, is a stand-in for small investors. Musk noted ARK Chief Investment Officer Cathie Wood as among the most influential people who did not want Tesla to go private because her fund could not participate, and said she “represents small investors” when Porritt asked him if he received feedback from small investors about the transaction.
But he was also combative at times with the plaintiffs’ counsel and managed to get in plenty of his own self-serving statements without being asked. Observers and jurors were all sitting socially distanced, with masks, making it difficult to read reactions on the jurors’ faces.It is much more reasonable to expect one of the world’s most successful businessmen to require more proof than “well, it worked last time,” before telling thousands of his investors that a deal is nearly done.
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