According to a bombshell lawsuit filed late Tuesday in California federal court by Elon Musk, Saudi Arabia agreed to fund a 2018 buyout of Tesla.
Musk details his version of events leading up to his Aug. 7, 2018, tweet, which sparked a social media firestorm — and a rap on the knuckles from federal regulators: “I’m thinking about taking Tesla private at $420.” That day, Musk tweeted, “Funding secured.”
Musk was charged with fraud by the Securities and Exchange Commission for his tweet, which resulted in a $20 million settlement, his resignation as Tesla’s chairman, and a requirement that his tweets be vetted by company lawyers. Meanwhile, Tesla stockholders filed a California class-action lawsuit after their shares rose about 13% in the aftermath of the tweet but then fell. They’re asking for a summary judgment.
According to the suit written by Quinn Emanuel Attorney Alex Spiro, Musk now claims in response to the class-action suit that he had funding secured for a deal to take Tesla private and thus couldn’t have defrauded investors.
According to the suit, “Mr. Musk firmly believed funding was secured when he tweeted.” According to the filing, “it was secured based on Mr. Musk’s discussions with the Saudi Arabia sovereign fund.”
Musk stepped down as chairman of Tesla and paid $20 million as part of a settlement with the Securities and Exchange Commission related to a fraud charge related to the tweet.
The Post obtained much of Tuesday’s filing, which was heavily redacted. Late Tuesday, the Saudi Arabia Public Investment Fund could not be reached.
Musk’s attorneys claim in the suit that he also approached the Tesla board before the tweet with a $420-a-share offer — a 20% premium to where the stock was trading that day in 2018. According to the lawsuit, Musk had his own financial and legal advisers working on a deal. The names of the alleged advisers are blacked out in the lawsuit.
The Saudis purchased a nearly 5% stake in Tesla, according to the Financial Times on August 7, 2018. On the same day, Musk sent out his now-famous $420 tweet. In early 2020, the Saudi fund reported that it had sold nearly all of its Tesla stock.