Elon Musk advised a San Francisco federal courtroom on Monday that he may have bought shares of SpaceX to take Tesla non-public in 2018. He was then, and nonetheless is, the CEO and largest shareholder of each firms.

Musk is being sued by Tesla shareholders for a sequence of tweets he wrote in August 2018 saying he had “funding secured” to take the automaker non-public for $420 per share, and that “investor assist” for such a deal was “confirmed.” Buying and selling in Tesla was halted after his tweets, and its share worth remained risky for weeks.

The shareholders within the licensed class motion lawsuit allege that Musk’s tweets had been reckless and false, and counting on his statements to make funding selections price them vital quantities of cash.

Musk would later declare that he had a verbal dedication from Saudi Arabia’s sovereign wealth fund, and was positive that funding would come via at his proposed worth primarily based on a handshake. Nonetheless, the deal by no means materialized.

Throughout his second day on the witness stand, Musk claimed that one more reason he mentioned he had “funding secured” for a deal again in 2018 was that he may have bought shares of SpaceX, a U.S. protection contractor and satellite tv for pc web firm that he additionally runs, in an effort to finance the transaction.

Musk mentioned underneath oath, “SpaceX inventory alone meant ‘funding secured’ by itself. It isn’t that I need to promote SpaceX inventory however I may have, and for those who take a look at the Twitter transaction — that’s what I did. I bought Tesla inventory to finish the Twitter transaction. And I’d have accomplished the identical right here.”  

Musk didn’t say what number of shares in his reusable rocket maker he would have been in a position to promote, to whom, and at what worth in an effort to finance the Tesla buyout.

In April 2018, SpaceX mentioned in a Securities and Change Fee submitting that it had raised about $214 million as a part of a financing spherical during which it was in search of greater than $500 million in whole fairness funding.

An lawyer for the shareholders, Nicholas L. Porritt of Levi & Korsinsky, requested Musk if the value he recommended for Tesla shares was a joke as a result of 420 is a reference to hashish in popular culture.

Musk insisted that this was coincidental. He mentioned, “There’s some, I believe, karma round 420… I ought to query whether or not that’s good or unhealthy karma at this level.”

This isn’t the primary authorized motion Musk has confronted over his tweets. The SEC charged Musk and Tesla with civil securities fraud shortly after he despatched them, they usually paid separate $20 million fines to the federal company to settle the fees. They later signed a revised consent decree that required Musk to relinquish his position as chairman of the board at Tesla quickly, and to have a securities lawyer vet tweets that comprise materials enterprise details about Tesla earlier than he posts them.

Musk lately grew to become the CEO of social media enterprise Twitter after main a $44 billion leveraged buyout of the corporate in October 2022. Saudi Prince Alwaleed bin Talal bin Abdulaziz is the social media firm’s second-largest shareholder after Musk. Final November, Sen. Chris Murphy, D.-Conn, despatched a letter to the Committee on Overseas Funding in the USA requesting a overview of the financing for the Musk-Twitter deal.