Musk defends Tesla going-private tweet in 2018 as 'truthful'

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Tesla CEO Elon Musk attends the Tesla Shanghai Gigafactory groundbreaking ceremony in Shanghai, China January 7, 2019. REUTERS/Aly Song

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  • Tesla CEO says jury should decide tweet's truthfulness
  • Investors who sued over tweet want judge to declare it false

(Reuters) - Tesla Inc Chief Executive Elon Musk said in a court filing that a tweet he had posted in 2018 saying funding was secured to take the electric vehicle company private in a $72 billion transaction was "entirely truthful."

Musk urged a judge in San Francisco to send an investors' lawsuit seeking damages over the tweet to trial in the papers filed late on Tuesday.

The investors asked U.S. District Judge Edward Chen to find that the tweet was false and that Musk sent it with wrongful intent. Their attorneys did not immediately return a request for comment.

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The lawsuit arose after Musk on Aug. 7, 2018 said on Twitter: "Am considering taking Tesla private at $420. Funding secured."

Musk's tweet pushed Tesla's stock price more than 13% above the prior day's close. But it soon erased those gains, and by Aug. 17, 2018 sank 11% below where it was before the tweet.

Some investors called the tweet a ploy to squeeze short-sellers, long an irritant for Musk, who were betting Tesla's stock would fall.

Musk tweeted on Aug. 24, 2018 that Tesla would remain public.

A month later, he agreed to pay a $20 million civil fine to settle fraud charges by the U.S. Securities and Exchange Commission. Tesla reached a separate $20 million settlement with the regulator.

The investors' lawsuit would proceed towards a trial set for late May if the judge denies their motion.

The case is In re Tesla Inc Securities Litigation, U.S. District Court, Northern District of California, No. 18-04865.

For Musk: Alex Spiro of Quinn Emanuel Urquhart & Sullivan

For the investors: Adam Apton of Levi & Korsinsky

Read more:

Tesla, Musk must face shareholder lawsuit over going-private tweet

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Jody Godoy reports on banking and securities law. Reach her at jody.godoy@thomsonreuters.com