Under siege: Musk trial adds to his mounting misfortunes

Musk was responsible for the recent wholesale sacking of around half the Twitter workforce.

But his legendary behaviour extends far beyond California, and he polarises opinion.

Responses to a questionnaire filled out by potential jury members reportedly contained responses including: “I think he’s a little off his rocker, on a personal level,” while another described him as “not a very likeable person”.

Meanwhile, the judge has already issued a pretrial ruling that Musk’s tweets were reckless and false and will instruct the jury accordingly.

Handicapped as Musk might be, those making the case must convince a jury that his comments were misleading and that the tweets were material enough to move Tesla’s share price.

Or should it be a case of “listener-beware” when it comes to interpreting throwaway or deliberate remarks made by Musk.

The US regulator certainly took issue with Musk’s disclosure at the time and hit him and Tesla with fines totalling $US40 million ($57 million), forced him to vacate the chairman’s role, and insisted the company appoint two independent directors.

The trial is a showcase  that will put the spotlight on Musk’s lack of a personal filter, his disdain for the regulatory rules on disclosure and obsessive overuse of his Twitter account.

At that time, the Securities and Exchange Commission said Tesla had no disclosure controls or procedures in place to determine whether Musk’s tweets contained information required to be disclosed in Tesla’s SEC filings. Nor did it have sufficient processes in place to ensure that Musk’s tweets were accurate or complete.

As much as this represented a public relations black eye for Musk, his credentials and his finances were far more damaged by last year’s acquisition of Twitter.

What looked like an appalling takeover at the time has only gotten worse as advertisers have abandoned the social media group and banks that lent Musk $US13 billion to finance the deal are reportedly preparing to take big losses.

Loading

Musk needs a win and the only place to find one will be via Tesla.

The company has regularly beaten market estimates in the past, the delivery numbers fell short in the December quarter. But this time around the challenges are greater. Tesla has dropped the prices on its electric vehicles in recent times to spur demand.

But the company has also needed to deal with commodity cost inflation and COVID disruptions in its China manufacturing.

That said the Tesla share price has defied the odds in since the start of the year – up more than 21 per cent.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.