Tesla Ceo Elon Musk After defending Tesla’s 2016 acquisition of SolarCity, he left the court in Wilmington, Delaware. (Reuters)

Wilmington, Delaware – Tesla founder Elon Musk appeared in the witness stand on Monday to defend his company’s 2016 acquisition of a troubled company called SolarCity, the lawsuit claims He is responsible for a transaction full of conflicts of interest and never realized profit. He promised.

Beyond everyone’s expectation, famous rich and colorful The billionaire did this in the most personally confrontational way.

“I think you are a bad guy,” Musk told shareholder lawyer Randall Barron, and he urged Musk to admit that he made a mistake in helping to design the acquisition of solar panel manufacturer SolarCity.

“I respect the court very much,” Musk added later, “but not for you, sir.”

A long-standing shareholder lawsuit alleges that Musk, the largest shareholder and chairman of SolarCity, and other Tesla directors violated their fiduciary duties, succumbed to Musk’s wishes and agreed to acquire the company. In the apparent conflict of interest that the plaintiff said, SolarCity was founded by Musk and his two cousins, Lyndon and Peter Reeve.

“I don’t want to be the boss of anything”

In the Delaware Chancery Court on Monday, Baron tried to prove that Musk tried to operate Tesla without interference and was therefore responsible for any failures. The lawyer showed a video in which Musk said he likes to run his own company because he doesn’t want anyone to force him to do things he doesn’t want to do.

As an example of his description of Musk’s bossy management style, Barron mentioned that the CEO once claimed to be a “Tesla technical expert” and gave his CFO the title of “Coin Master”-this A reference to HBO’s “Game of Thrones” — in a filing with the U.S. Securities and Exchange Commission.

The hostility between the billionaire CEO and the plaintiff’s lawyer dates back to at least 2019, and Musk’s testimony of insulting the Baron and questioning his professionalism. On Monday, Barron played a segment of the testimony, trying to portray Musk’s stance on what he might think is critical.

Musk retorted, “I don’t want to be the boss of anything.”

“I prefer to spend time on design and engineering,” he said.

Musk, known for refusing to be suspicious of himself or his company, insists that he welcomes criticism:

“If I get it wrong,” he said on the witness stand, “I think critical feedback is a gift.”

Musk said that his distinctive title and other witty remarks just reflect his sense of humor.

“I think I am funny,” he said.

He said that more importantly, the resulting media attention is often beneficial to Tesla.

“If we are funny, people will write stories about us” and the company can save advertising. “

Confidence in SolarCity

Regarding Tesla’s all-stock acquisition of SolarCity, Musk asserted that he did not get any financial benefits from it because he owns shares in both companies.

Musk also argued that SolarCity’s failure to meet aggressive sales forecasts and the loss of market share was only a temporary setback.He said this reflects his decision to shift Tesla resources to save production Tesla Model 3 Electric cars-and then “head into a pandemic.”

Musk said that the effort to save Tesla 3 was a “full participation” action-so desperate that even the company’s lawyers participated in this effort, which caused laughter in the court.

Musk’s defense pointed out that SolarCity was in Tesla’s plan as early as in his master plan for the electric car manufacturer in 2006. In saying this, he asserted that joining these companies 10 years later was not an emergency rescue as the plaintiff claimed.

But Baron pointed out that the 2006 document only mentioned potential marketing arrangements between Tesla and SolarCity, not a full-scale merger or acquisition.

Baron repeatedly pressed Musk to prove that SolarCity was in trouble before Tesla was acquired-lack of cash, inability to obtain financing, and risk of violating the terms of the existing loan agreement.

Musk admitted nothing. He believes that SolarCity can raise funds by issuing shares, if it wants to. He pointed out that fast-growing young companies, including Amazon and Tesla itself, often bleed heavily in the early years and only succeed later.

Baron asked, why did Space X, another Musk company, abandon its investment guidelines to buy risky SolarCity bonds? Musk replied that these bonds provide better returns than bank accounts that pay slightly above zero.

“I have full confidence in the future of SolarCity,” Musk said.

Barron tried to determine whether Musk had avoided Tesla’s negotiations with Solar City to avoid a conflict of interest.

“I have no substantive role,” Musk said.

“What is a’material role’?” The baron fought back. “To me, it sounds like a wavering word.”

“You are an expert in swing words,” Musk retorted.

“Bad first, good later”

The trial that began on Monday marked the final result of seven shareholder lawsuits, which were combined into one, alleging that Tesla directors violated their fiduciary duties, succumbed to Musk’s wishes and agreed to acquire SolarCity. In August last year, a judge approved a $60 million settlement to settle claims against all directors of Tesla’s board of directors except Musk, but did not admit any fault.

This makes Musk, who refused to settle, the only remaining defendant. The trial, which started on Monday, was originally scheduled to take place in March last year, but was postponed due to the virus pandemic.

Daniel Ives, an analyst at Wedbush Securities, called the acquisition a “obvious dark circle” for Musk and Tesla, largely because SolarCity failed to achieve profitability.

Ives said: “This is basically putting good money on bad money.” “For all the successes and all the unimaginable heights that Musk has achieved, this is a low point.”

Even if the trial ends with Musk having to pay for the entire SolarCity transaction in person, $2.5 billion will not cause much harm to the world’s third richest man. Forbes magazine estimates that Musk’s worth is approximately $163 billion.


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