Elon Musk defends his old tweets in securities fraud trial in San Francisco

Tesla CEO Elon Musk appeared successful a San Francisco national tribunal connected Friday to support tweets helium posted to his tens of millions of followers successful August 2018.

The tweets said helium had "funding secured" to instrumentality his electrical conveyance institution backstage for $420 per share, and that "investor support" for specified a woody was "confirmed."

Tesla's banal trading initially halted aft the tweets, past shares were highly volatile for weeks. Musk later said that helium had been successful discussions with Saudi Arabia's sovereign wealthiness money and felt definite that backing would travel done astatine his projected price. A woody ne'er materialized.

The SEC charged Musk and Tesla with civilian securities fraud aft the tweets. Musk and Tesla each paid $20 cardinal fines to the agency, and struck a revised colony statement that required Musk to temporarily relinquish his relation arsenic president of the committee astatine Tesla.

His 2018 tweets besides triggered a shareholder people enactment suit from Tesla investors. They alleged that Musk's tweets misled them and said relying connected his statements to marque trades outgo them important amounts of money.

The shareholders' trades successful question took spot during a 10-day play earlier Musk seemed to admit a take-private woody was not going to hap successful 2018.

Musk said nether oath connected Friday that it's hard to nexus Tesla's banal terms to his tweets.

"There person been galore cases wherever I thought that if I were to tweet something, the banal terms would spell down," Musk said. "For example, astatine 1 constituent I tweeted that I thought that, successful my opinion, the banal terms was excessively high...and it went went higher, which was, which is, you know, counterintuitive."

It's uncommon for apical executives astatine publically traded companies to sermon their banal terms due to the fact that immoderate commentary tin power terms movements.

Daniel Taylor, manager of the Wharton Forensics Analytics Lab and prof astatine the University of Pennsylvania, analyzed each commercialized successful Tesla banal occurring connected Aug. 7, 2018, the time that Musk tweeted. He calculated the full trading measurement each infinitesimal from the clip the marketplace opened done the clip of Musk's tweets astir a buyout. 

Taylor recovered that the trading measurement the infinitesimal Musk tweeted, astatine 12:48 p.m. ET that day, was implicit $350 million, and the trading measurement for Tesla shares the adjacent infinitesimal was implicit $250 million. By comparison, the mean measurement 5 minutes earlier Musk tweeted was $32 cardinal per minute. The infinitesimal earlier Musk tweeted, trading measurement was $24 million.  

"It is mostly existent that correlation is not causation," Taylor told CNBC connected Friday, aft Musk's archetypal time connected the witnesser stand. "However, I americium unaware of immoderate alternate mentation for a 10-fold summation successful trading measurement the aforesaid infinitesimal that Elon Musk tweeted."

Musk besides testified astir his debased sentiment of abbreviated sellers connected Friday.

"I judge abbreviated selling should beryllium made illegal," Musk said, referring to abbreviated sellers arsenic "bad radical connected Wall Street" who "steal" from different investors. He said they besides works stories successful the media to "get the banal to spell down" and volition "do thing successful their powerfulness to marque a institution die."

Tesla was among the astir heavy shorted stocks successful August 2018, erstwhile Musk made the statements astir taking Tesla private. Tesla's stock terms surged astir 10% during trading that day. Short sellers look tremendous losses erstwhile shares successful a fixed institution ascent higher.

Some of the plaintiffs successful the proceedings that's underway assertion that Musk's "funding secured" tweets were intended to enactment upward terms unit connected Tesla's banal driving a alleged "short squeeze."

Musk's grounds is not yet implicit and the tribunal plans to perceive from him again connected Monday.

WATCH: Musk testifies implicit tweets