Elon Musk’s team has subpoenaed the head of Saudi Arabia’s Public Investment Fund as part of litigation over the Tesla CEO’s 2018 tweet that he was considering taking the car company private and had secured funding to do so.
Tesla (TSLA) shareholders sued Musk in 2018, alleging that he did not, in fact, have “funding secured” to take the company private at $420 per share, as he had said in a tweet that year, a number that seemingly referenced the unofficial holiday of cannabis enthusiasts. The tweet caused wild swings in Tesla (TSLA)’s stock that investors claimed hurt their portfolios. Musk eventually settled with the US Securities and Exchange Commission over the tweets, stepping down as Tesla (TSLA) chairman and agreeing to oversight of his social media use, although he has appeared to flout the agreement several times.
Musk has long maintained that he was considering taking Tesla private at the time he made the tweet. He has said his “funding secured” comment was based on talks with Saudi Arabia’s enormous sovereign wealth fund, which he said had urged him to take the company private and offered to increase its investment in Tesla. Saudi Arabia’s Public Investment Fund invests in entities that are important to the country’s economic growth, and says it had $620 billion assets under management as of early 2022.
Musk’s team is now seeking to have Yasir al-Rumayyan, the head of the fund, testify as part of the litigation, according to a subpoena that was served in December and filed Tuesday. Musk’s team also subpoenaed three other members of the Saudi Public Investment Fund. The fund declined to comment to CNN regarding the subpoenas.
The trial for the case is set to begin later this month.
A series of text messages between Musk and al-Rumayyan from 2018, which were revealed in a June court filing in the litigation, offer some insight into the funding discussions between Musk’s Tesla and the sovereign wealth fund, which already had a small investment in the carmaker.
In the text exchange between the two men, which took place in the wake of the backlash to the “funding secured” tweet, Musk hinted at a conversation they had at Tesla in which al-Rumayyan said he was “definitely interested in taking Tesla private and had wanted to do so since 2016.” In the same text message, Musk added: “You also made it clear that you were the decision-maker, moreover backed strongly by the Crown Prince, who regards this as strategically important at a national level.”
Musk urged al-Rumayyan to make a statement confirming that the Saudi wealth fund wanted to help take Tesla private. “It is extremely important that you confirm that you are in discussions with me regarding the take private transaction. Nothing more needs to be said. If this is not said, we will never speak again. Never,” Musk said. The Tesla CEO also expressed frustration about several news reports citing unnamed sources that suggested the Saudi fund had shown no interest in funding a take-private deal.
But al-Rumayyan pushed back.
“We cannot approve something that we don’t have sufficient information on,” he said in a response to Musk. “We’ve agreed that you will send the financial information and the way going forward and nothing has happened since … I am your friend. So, please don’t treat me like an enemy.”
Following al-Rumayyan’s repeated requests for additional information, Musk said he planned to engage different investors in a take-private deal, the text messages show. He abandoned the idea weeks later.
The trial in the shareholder lawsuit comes at a difficult time for Tesla and Musk, who is also facing pressure from the carmaker’s shareholders to spend less time with the newest company under his control, Twitter. Tesla shares on Tuesday experienced their worst day in two years after the company reported weaker than expected global sales.