Tesla CEO Elon Musk speaks at an event in Hawthorne, California April 30, 2015.
Patrick T Fallon | Portal
Attorneys for Tesla and Elon Musk are asking a federal judge in San Francisco to move or postpone an upcoming trial from northern California to west Texas.
Musk and other current and former Tesla board members will face a jury in a shareholder class action lawsuit alleging the CEO manipulated Tesla’s stock in 2018 when he tweeted that he was considering privatizing his electric vehicle company for $420 per share and had “secured the financing” to do so.
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Tesla stock trading was initially halted, then stocks were very volatile for weeks after the tweets.
By that year, Musk was living in California and Tesla was headquartered in Palo Alto. The CEO of Tesla and SpaceX relocated to Texas in 2020, and his electric vehicle company moved its headquarters to Austin in 2021.
In 2022, Northern California Chief District Judge Edward M. Chen, who is overseeing the trial, ruled that Musk’s statements in 2018 were false and that he had knowingly tweeted them.
The upcoming trial and jury will decide whether Musk’s now-infamous tweets mattered to shareholders, if and how they impacted Tesla’s stock price, and whether the company or its directors should be held liable and pay damages.
In a motion to change jurisdiction, attorneys for Tesla and Musk argue that the CEO received extensive and negative publicity in California after he acquired a San Francisco-based social media company, Twitter, in October 2022.
Musk proclaimed himself CEO of Twitter and has laid off thousands of employees in a series of chaotic layoffs and layoffs since the deal closed.
At a recent public appearance in San Francisco, Musk was booed after comedian Dave Chappelle invited him on stage.
Alex Spiro, a partner at Quinn Emanuel Urquhart & Sullivan who has represented Musk in several lawsuits, argued in this recent filing:
“A sizeable portion of the jury in this district is likely to harbor a personal and material bias against Mr. Musk as a result of recent firings at one of his companies, as individual potential jurors – or their friends and relatives – may have been personally the existing baseline distortion has been through.” exacerbated, expanded and amplified the negative and inflammatory local publicity surrounding the events.
Spiro added in the filing that the “negativity toward Mr Musk was not limited to the press.” He said there are regular protests and pickets outside Musk’s San Francisco offices, adding that some have “the support and encouragement of local politicians.”
Musk and his attorneys have previously argued that his comments about a potential take-private deal for Tesla in 2018 did not break the law.
The Tesla CEO has repeatedly claimed he has struck a handshake deal with investors in the Public Investment Fund of Saudi Arabia to privatize Tesla for $420 per share. Text messages revealed in another trial in 2022 suggested Saudi PIF investors had not fully agreed to fund a Tesla deal.
Court filings this month in the securities class action show that Musk’s lawyers subpoenaed four people who help run the Saudi Public Investment Fund to testify in the lawsuit, including Naif Al Mogren, Saad Al Jarboa, Turqi Alnowaise and Yasir Al -Rumayyan.
Read the In Re: Tesla Inc. Securities Litigation filing here (Case 3:18-cv-04865-EMC):