The billions said to have been lost reflect the impact on the price of options during a 10-day period as the proposed plan to take Tesla private fell apart.
Tesla investors lost $US12 billion over 10 days after Elon Musk famously tweeted in 2018 that he had “funding secured” to take the company private, a witness testified at a trial over the CEO’s liability.
Investors argue Musk’s tweets amounted to a violation of securities laws because his bankers had been barely consulted and hadn’t formally signed on to his take-private plan.that he was considering taking the electric-car maker private. Investors have called numerous witnesses, including a top Goldman Sachs Group executive, to make their case that the tweets triggered dramatic fluctuations in Tesla’s share price, causing their trading losses and the damages delineated at trial on Tuesday.
Earlier the jurors heard from Steven Heston, a professor of finance at the University of Maryland. Another expert witness for the investors, Heston explained Tesla options for the jurors, telling them the company has one of the most active markets for puts and calls of any stock. He said that while individual investors buy options, they’re used mostly by institutional investors — mutual and pension funds and insurance companies.
Musk has testified that the “funding secured” tweet was “absolutely truthful”, touting what he described asto back the go-private plan with billions of dollars — even though he had nothing in writing.
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