In a federal civil trial over the last three weeks, lawyers for Elon Musk, Tesla’s chief executive, have characterized him as such a successful businessman that he could have easily obtained financing to take Tesla private in 2018. A former Tesla director, Antonio Gracias, called Mr. Musk “the Michael Jordan of fund-raising.”
But investors suing Mr. Musk, Tesla and the company’s board said his embryonic plan to take the company private had devastating financial consequences for them. One investor, Glen Littleton, called the fallout from the plan “a threat to my livelihood.”
Which of the two sides presented a more convincing case will be decided by a jury of seven men and two women, who began deliberations on Friday. Mr. Musk appeared in federal court in San Francisco on Friday for closing arguments in the case. Depending on how the jury rules, Mr. Musk and Tesla could be ordered to pay billions of dollars in damages to investors.
Two posts on Twitter by Mr. Musk are at the heart of the case. On Aug. 7, 2018, Mr. Musk wrote on Twitter: “Am considering taking Tesla private at $420. Funding secured.” He then wrote: “Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote.” Tesla’s share price jumped after those posts and then tumbled after the proposal fell apart in less than three weeks.
The judge overseeing the case, Edward M. Chen, has already ruled that “funding secured” and Mr. Musk’s second statement were untrue, and that Mr. Musk was reckless when posting them. But the jury must find whether these statements, not other statements from Mr. Musk or Tesla, caused the investors’ losses.
Legal experts have said that most companies and executives would settle a case like this. But Mr. Musk has often been willing to fight lawsuits and go to trial. Winning this case would allow him to claim vindication for a dark period in his professional life.
Mr. Musk, wearing a dark suit and black surgical mask, entered the courtroom on Friday and walked straight to a table with his lawyers. He waved to an associate in the gallery and pushed a microphone away before bantering with his lawyers. Mr. Musk had posted on Twitter about the social media company sharing advertising revenue with creators less than 10 minutes before entering. He posted twice from the courtroom while waiting for closing arguments to begin.
Throughout the trial, the investors’ lawyers have argued that Mr. Musk knew Tesla was nowhere near going private because no individuals and investment funds had committed specific amounts of money to the deal. There was also neither a definitive structure for a private Tesla nor a clear path to regulatory approval for the plan.
“This case is about whether rules that apply to everybody else should apply to Elon Musk,” Nicholas Porritt, a lawyer for the investors, said during closing arguments. He added that the stock market “only works because there are rules that keep people honest, so people can trust information in the market.”
Mr. Musk’s and Tesla’s legal team have argued that the company’s share price may have moved because Mr. Musk said he was considering taking Tesla private, a statement that they say was true. They have also argued that funding was actually plentiful but that Mr. Musk didn’t have exact numbers because he didn’t know how many shareholders would want to continue owning shares in Tesla once it was no longer on the stock exchange.
“Funding was not an issue,” said Alex Spiro, a lawyer for Mr. Musk and Tesla. He added that the deal collapsed because “his motive was to do right for the shareholders.”
Jury deliberations in the case are beginning less than four months after Mr. Musk acquired Twitter, whose headquarters are a half-mile from the federal court in San Francisco.
In 2018, Mr. Musk and Tesla settled a separate lawsuit with the Securities and Exchange Commission about his plan to take Tesla private. They paid $40 million in fines to the S.E.C., and Mr. Musk agreed to resign as Tesla’s chairman and to allow a lawyer to review some statements about Tesla before posting them on social media. Mr. Musk is currently trying to terminate parts of that agreement in the U.S. Court of Appeals for the Second Circuit.