(Reuters) – A federal court jury in San Francisco found on Friday that Tesla Inc. CEO Elon Musk and his company were not liable for misleading investors when he tweeted in 2018 that he had arranged financing to take the electric car company private.
The plaintiffs had demanded billions in damages and the decision had also been seen as important for Mr. himself, who has aggressively defended his ability to tweet widely.
The jury returned with a verdict about two hours after deliberations began.
“The jury got it right,” Musk’s lawyer, Alex Spiro, told reporters after the verdict. He declined to say more.
Musk was not present in court when the verdict was read.
“We are disappointed by the verdict and are considering next steps,”; Nicholas Porritt, a lawyer for the investors, said in a statement.
Tesla shareholders claimed that Musk misled them when he tweeted on August 7, 2018 that he was considering taking the company private for $420 per share, a premium of about 23% to the previous day’s close, and that he had “secured financing.”
They say Musk lied when he tweeted later that day that “investor support is confirmed.”
The stock price soared after the tweets and then fell again after August 17, 2018, when it became clear that the purchase would not go through.
Mr. Porritt said during closing arguments that the billionaire CEO is not above the law and should be held accountable for the tweets.
“This case is ultimately about whether rules that apply to everyone else should also apply to Elon Musk,” he said.
Mr Spiro countered that Musk’s “funding-backed” tweet was “technically incorrect” but that investors only cared that Musk was considering a purchase.
“The whole case is based on poor wording,” he said. “Who cares about poor word choice?”
“Just because it’s a bad tweet doesn’t make it fraud,” Spiro said during closing arguments.
An economist hired by the shareholders had calculated investor losses as high as $12 billion.
During the three-week trial, Musk spent nearly nine hours on the witness stand telling jurors he believed the tweets were true. He said he had arranged the necessary financing, including a verbal commitment from Saudi Arabia’s sovereign wealth fund, the Public Investment Fund. The fund later backtracked on its commitment, Musk said.
Musk later testified that he believed he could have sold enough stock in his rocket company SpaceX to finance a buyout, and “felt the financing was assured” with SpaceX stock alone.
Musk testified that he made the tweets to put small shareholders on the same terms as large investors who knew about the deal. But he admitted he lacked formal commitments from the Saudi fund and other potential backers.
He said his tweets generally didn’t always have the impact on Tesla stock that he expects.
“Just because I tweet something doesn’t mean people believe it or will act on it,” Musk told the jury.