Elon Musk testifies he would have sold SpaceX stock to take Tesla private in 2018
Elon Musk speaks near a Falcon 9 rocket during his announcement that Japanese billionaire Yusaku Maezawa will be the first private passenger who will fly around the Moon aboard the SpaceX BFR launch vehicle.
DAVID MCNEW | AFP | Getty Images
Elon Musk told a San Francisco federal court on Monday that he could have sold shares of SpaceX to take Tesla private in 2018. He was then, and still is, the CEO and largest shareholder of both companies.
Musk is being sued by Tesla shareholders for a series of tweets he wrote in August 2018 saying he had “funding secured” to take the automaker private for $420 per share, and that “investor support” for such a deal was “confirmed.” Trading in Tesla was halted after his tweets, and its share price remained volatile for weeks.
The shareholders in the certified class action lawsuit allege that Musk’s tweets were reckless and false, and relying on his statements to make investment decisions cost them significant amounts of money.
Musk would later claim that he had a verbal commitment from Saudi Arabia’s sovereign wealth fund, and was sure that funding would come through at his proposed price based on a handshake. However, the deal never materialized.
During his second day on the witness stand, Musk claimed that another reason he said he had “funding secured” for a deal back in 2018 was that he could have sold shares of SpaceX, a U.S. defense contractor and satellite internet company that he also runs, in order to finance the transaction.
Musk said under oath, “SpaceX stock alone meant ‘funding secured’ by itself. It’s not that I want to sell SpaceX stock but I could have, and if you look at the Twitter transaction — that is what I did. I sold Tesla stock to complete the Twitter transaction. And I would have done the same here.”
Musk did not say how many shares in his reusable rocket maker he would have been able to sell, to whom, and at what price in order to finance the Tesla buyout.
In April 2018, SpaceX said in a Securities and Exchange Commission filing that it had raised about $214 million as part of a financing round in which it was seeking more than $500 million in total equity funding.
An attorney for the shareholders, Nicholas L. Porritt of Levi & Korsinsky, asked Musk if the price he suggested for Tesla shares was a joke because 420 is a reference to cannabis in pop culture.
Musk insisted that this was coincidental. He said, “There is some, I think, karma around 420… I should question whether that is good or bad karma at this point.”
This is not the first legal action Musk has faced over his tweets. The SEC charged Musk and Tesla with civil securities fraud shortly after he sent them, and they paid separate $20 million fines to the federal agency to settle the charges. They later signed a revised consent decree that required Musk to relinquish his role as chairman of the board at Tesla temporarily, and to have a securities lawyer vet tweets that contain material business information about Tesla before he posts them.
Musk recently became the CEO of social media business Twitter after leading a $44 billion leveraged buyout of the company in October 2022. Saudi Prince Alwaleed bin Talal bin Abdulaziz is the social media company’s second-largest shareholder after Musk. Last November, Sen. Chris Murphy, D.-Conn, sent a letter to the Committee on Foreign Investment in the United States requesting a review of the financing for the Musk-Twitter deal.
Technology
Trump advisor Navarro rips Apple’s Tim Cook for not moving production out of China fast enough
White House trade advisor Peter Navarro chastised Apple CEO Tim Cook on Monday over the company’s response to pressure from the Trump administration to make more of its products outside of China.
“Going back to the first Trump term, Tim Cook has continually asked for more time in order to move his factories out of China,” Navarro said in an interview on CNBC’s “Squawk on the Street.” “I mean it’s the longest-running soap opera in Silicon Valley.”
CNBC has reached out to Apple for comment on Navarro’s criticism.
President Donald Trump has in recent months ramped up demands for Apple to move production of its iconic iPhone to the U.S. from overseas. Apple’s flagship phone is produced primarily in China, but the company has increasingly boosted production in India, partly to avoid the higher cost of Trump’s tariffs.
Trump in May warned Apple would have to pay a tariff of 25% or more for iPhones made outside the U.S. In separate remarks, Trump said he told Cook, “I don’t want you building in India.”
Analysts and supply chain experts have argued it would be impossible for Apple to completely move iPhone production to the U.S. By some estimates, a U.S.-made iPhone could cost as much as $3,500.
Navarro said Cook isn’t shifting production out of China quickly enough.
“With all these new advanced manufacturing techniques and the way things are moving with AI and things like that, it’s inconceivable to me that Tim Cook could not produce his iPhones elsewhere around the world and in this country,” Navarro said.
Apple currently makes very few products in the U.S. During Trump’s first term, Apple extended its commitment to assemble the $3,000 Mac Pro in Texas.
In February, Apple said it would spend $500 billion within the U.S., including on assembling some AI servers.
WATCH: Apple’s $500 billion investment: For AI servers not manufacturing iPhones
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