Ex-aide says Elon Musk had ‘handshake deal’ for Tesla buyout
SAN FRANCISCO (AP) — Elon Musk’s former chief of staff on Wednesday testified that the billionaire believed he had a “handshake deal” to take Tesla private in 2018 shortly before he tweeted he had the financing for an aborted buyout that is still haunting him in a high-profile trial.
Sam Teller, who worked closely Musk from 2014 to 2019, detailed a series of meetings that his former boss held with representatives from Saudi Arabia’s Public Investment Fund. His remarks came during testimony that also shed light on the quirks of a billionaire who runs Tesla, rocket ship maker SpaceX and Twitter.
Among other things, Teller said he sometimes had to “soften” Musk’s blunt emails. Teller attributed Musk’s brusque manner to Asperger’s syndrome, a form of autism that Musk acknowledged having during a May 2021 television appearance hosting “Saturday Night Live.”
Teller’s testimony came on the ninth day of a trial triggered by a class-action lawsuit filed on behalf of Tesla shareholders alleging Musk misled them with tweets in August 2018. In the tweets, Musk indicated he had locked up the money to lead a buyout of the electric automaker, ending its then eight-year history as a publicly held company. The case is scheduled to be turned over to the nine-person jury Friday.
Musk, 51, spent much of his roughly eight hours on the witness stand earlier in the trial maintaining he had a valid reason for disclosing he had “ funding secured” for a Tesla buyout in an Aug. 7, 2018 tweet at $420 deal — a price that valued the electric automaker at $72 billion at that time.
Teller was summoned to the stand Wednesday by Musk’s lawyers in an attempt to substantiate and elaborate upon the billionaire’s testimony.
In the last of five meetings held with Saudi fund that began in January 2017, Teller said Musk became increasingly excited as he discussed taking Tesla private with Yasir al-Rumayyan, a governor for the Saudi fund, during a July 31, 2018 meeting.
Although specific financing amounts were discussed, Teller recalled Musk pointing out to al-Rumayyan that taking Tesla private would be expensive.
“Yasir was, like, ‘Don’t worry about it, we’ve got a lot of money,’” Teller said.
As he watched the two men happily conclude their meeting, Teller said, “It was my sense they made a handshake deal to proceed” with taking Tesla private.
A week later, Musk tweeted he had the money for the buyout shortly after being alerted that the Financial Times was about to publish a story disclosing the Saudi fund had built a 5% stake in Tesla — a stake that he knew about but hadn’t been publicly announced.
Amid widespread confusion about whether Musk’s Twitter account had been hacked or he was joking, Musk followed up a few hours later with another tweet suggesting a deal was imminent.
The prospect of Tesla stock being sold caused the shares to soar during a 10-day period covered by the shareholder lawsuit that led to the current trial. The stock price dropped after Musk scrapped the going-private proposal, resulting in billions of dollars in losses, based on the estimates provided in testimony by an economist hired by the shareholder attorneys as an expert witness in the trial.
After the Securities and Exchange Commission alleged Musk’s tweets were misleading, he and Tesla reached a $40 million settlement in September 2018 without acknowledging wrongdoing. U.S. District Judge Edward Chen, who is presiding over the current trial, also has declared Musk’s tweets to be falsehoods, leaving it to the jurors to decide if he posted them recklessly.
During his testimony, Teller revealed that Musk doesn’t like anyone filtering information for him. “He is the type of CEO who likes to absorb his communications,” Teller said.
Even so, Teller likened his job to an air traffic controller confronted with “a lot of problem solving” at all hours. “Most of my waking hours were working,” Teller said, a grueling schedule that led him to stop working for Musk in 2019. “I was pretty tired and it was time to do something else,′ Teller said.