Tesla Investors Lost $17 Billion After Tweets, Jury Says

Heston shared his research on what has happened to the Tesla options since August 7, 2018, when Musk posted his tweets covering 10 days when the proposed plan to privatize the company fell apart. He noted an “abrupt move” in option prices over the period and an “unprecedented” pattern in long-term option price volatility.

Heston showed jurors how a short-term call option, which expires a month after Musk’s tweet, rose nearly $2 at an exercise price of $420 — the stock price Musk said Tesla would go private at. A long-term call at the same stock price, but expiring on Jan. 17, 2020, lost $22.40.

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Musk has testified that the “funding secured” tweet was “absolutely truthful” in promoting an “unambiguous” commitment by the Saudi Arabian sovereign wealth fund to back the Go Private plan with billions of dollars — despite saying nothing doing had writing.

Investors argue that Musk’s tweets violated securities laws because his bankers were rarely consulted and failed to formally sign off on his take-private plan. Investment banking witnesses told jurors last week that even a week after the tweet, they were still working to figure out how the deal would be structured, including who would pay for it.