Nicholas Porritt, top, a lawyer representing Tesla shareholders in the class-action case, arrives at a federal courthouse in San Francisco, Friday, Jan. 20, 2023. (AP Photo/Jeff Chiu)
Elon Musk appeared in court Friday to defend a 2018 tweet claiming he had lined up the financing to take Tesla private in a deal that never came close to happening.
The tweet resulted in a $40 million settlement with securities regulators. It also led to a class-action lawsuit alleging he misled investors, pulling him into court Friday.
The mercurial billionaire took the witness stand wearing a dark suit on the third day of a civil trial in San Francisco that his lawyer unsuccessfully tried to move to Texas, where Tesla is now headquartered, on the premise that media coverage of his tumultuous takeover of Twitter had tainted the jury pool.
The nine-person jury assembled earlier this week will be responsible for deciding whether a pair of tweets that Musk posted on Aug. 7, 2018 damaged Tesla shareholders during a 10-day period leading up to a Musk admission that the buyout he had envisioned wasn’t going to happen.
A month later, Musk stepped down as Tesla’s chairman while remaining CEO as part of the Securities and Exchange Commission settlement without acknowledging any wrongdoing.
In the first of those those two 2018 tweets, Musk stated “funding secured” for a what would have been a $72 billion buyout of Tesla at a time when the electric automaker was still grapping with production problems and was worth far less than it is now. Musk followed up a few hours later with another tweet suggesting a deal was imminent.
On the stand Friday, Musk — who last year bought Twitter for $44 billion — said tweeting is “most democratic way” to communicate with investors.
“I care a great deal about retail investors,” he said during questioning by shareholder attorney Nicholas Porritt.
But he acknowledged that investors can get more detail in a corporate filing with securities regulators, given the character limits set on Twitter.
“I think you can absolutely be truthful” on Twitter, Musk said. “But can you be comprehensive? Of course not.”
Even before Musk took the stand, U.S. District Judge Edward Chen had declared that the jurors can consider those two tweets to be falsehoods, leaving them to decide whether Musk deliberately deceived investors and whether his statements saddled them with losses.
Musk has previously contended he entered into the SEC settlement under duress and maintained he believed he had locked up financial backing for a Tesla buyout during meetings with representatives from Saudi Arabia’s Public Investment Fund.
The trial over his Tesla tweets come at a time when he has been focusing on Twitter, which he acquired in October after trying to back out of that purchase.
Musk’s leadership of Twitter — where he has gutted the staff and alienated users and advertisers — has proven unpopular among Tesla’s current stockholders, who are worried he has been devoting less time steering the automaker at a time of intensifying competition. Those concerns contributed to a 65% decline in Tesla’s stock last year that wiped out more than $700 billion in shareholder wealth — far more than the $14 billion swing in fortune that occurred between the company’s high and low stock prices during the Aug. 7-17, 2018 period covered in the class-action lawsuit.
Tesla’s stock has split twice since then, making the $420 buyout price cited in his 2018 tweet worth $28 on adjusted basis now. The company’s shares were trading around $133 Friday, down from the company’s November 2021 split-adjusted peak of $414.50.
After Musk dropped the idea of a Tesla buyout, the company overcame its production problems, resulting in a rapid upturn in car sales that caused its stock to soar and minted Musk as the world’s richest person until he bought Twitter. Musk dropped from the top spot on the wealth list after the stock market’s backlash to his handling of Twitter.
TORONTO – Magna International Inc. says it has launched a targeted review of its historical records in response to sexual assault charges against founder Frank Stronach.
Magna spokeswoman Tracy Fuerst says the review process is complicated because of the passage of time.
Fuerst says that if relevant information is found, the company, which is not facing any criminal or civil allegations, will follow a strict protocol to respect the legal rights of all and co-operate with authorities.
To date, the auto parts company’s internal document review has discovered one settlement involving a historical harassment allegation against Stronach and Magna Entertainment Corp. that had already been reported.
Stronach gave up control of Magna in 2010 and stepped down as chairman in 2012.
He faces charges including rape, attempted rape, indecent assault, forcible confinement and sexual assault in connection with alleged incidents that date as far back as 1977. Stronach has said he is not guilty and that he will fight the charges.
This report by The Canadian Press was first published Oct. 3, 2024.
CALGARY – Enbridge Inc. says it will spend about US$700 million to build new crude oil and natural gas pipelines in the U.S. Gulf of Mexico for the Kaskida development, operated by BP Exploration & Production Co.
The crude oil pipeline, named the Canyon Oil Pipeline System, will have a capacity of 200,000 barrels per day and originate in the Keathley Canyon area of the gulf.
It will deliver crude to the existing Green Canyon 19 platform, operated by Shell Pipeline Co. LP for ultimate delivery to the Louisiana market.
The natural gas pipeline, named the Canyon Gathering System, will have a capacity of 125 million cubic feet per day.
It will connect to Enbridge’s existing Magnolia Gas Gathering Pipeline.
The company says detailed design and procurement activities are expected to start early next year with the pipelines expected to be operational by 2029.
This report by The Canadian Press was first published Oct. 3, 2024.
CALGARY – TC Energy Corp. has completed its spinoff of South Bow Corp., its crude oil pipelines business, as an independent company.
The new company, which will be headquartered in Calgary with an office in Houston, will be led by Bevin Wirzba, formerly the executive vice-president for TC Energy’s natural gas and liquids pipelines business.
South Bow will run TC Energy’s crude oil pipelines business, including the critical Keystone pipeline system.
The move is the result of a strategic review in which the Calgary-based TC considered its options including the potential sale of the oil pipelines business.
Spinning off the oil pipelines business, which has long-term committed contracts with oil shippers, will give South Bow the chance to use its robust cash flows to pay down debt and enhance shareholder returns, while TC Energy will become a growth-oriented company focused on natural gas.
TC Energy — which has natural gas transportation infrastructure in Canada, the U.S., and Mexico — is bullish on the future of the commodity, in particular the potential for growth spurred by demand for liquefied natural gas (LNG).
TC Energy also has plans to look at new, low-carbon energy opportunities such as nuclear and pumped hydro energy storage.
The company has been under scrutiny by analysts and credit ratings for its significant debt load as well as for cost overruns on the Coastal GasLink pipeline project, which was completed in the fall of 2023.
TC Energy shareholders voted in favour of the spinoff of the crude pipelines business in a vote in June.
South Bow common shares were distributed Tuesday to TC Energy shareholders of record on Sept. 25. Shareholders received one South Bow common share for every five TC Energy common shares owned.
South Bow’s common shares are expected to start trading on the Toronto Stock Exchange on Wednesday under the ticker symbol SOBO. Trading on the New York Stock Exchange is expected to start on or about Oct. 8.
This report by The Canadian Press was first published Oct. 1, 2024.
