Tesla investors lost $17b after Elon Musk tweets, jury told

Heston shared his research for what happened to Tesla options from August 7, 2018, when Musk posted his tweets, over 10 days, as the proposed plan to take the company private fell apart. He noted an “abrupt movement” in options prices over the period and an “unprecedented” pattern in the volatility of long-term options prices.

Heston showed the jurors how a short-term call option expiring one month after Musk’s tweet, at a strike price of $US420 – the share price at which Musk said Tesla would go private – rose almost $US2. A long-term call at the same stock price but expiring January 17, 2020, lost $US22.40.

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Musk has testified that the “funding secured” tweet was “absolutely truthful,” touting what he described as an “unequivocal” commitment by Saudi Arabia’s sovereign wealth fund to back the go-private plan with billions of dollars — even though he had nothing in writing.

Investors argue Musk’s tweets amounted to a violation of securities laws because his bankers had been barely consulted and hadn’t formally signed on to his take-private plan. Investment banking witnesses told jurors last week that even a week after the tweet, they were still working to figure out how the deal would be structured, including who would pay for it.