420 is not a joke, Elon Musk testifies

Musk took the witness stand on Monday in a securities fraud trial involving his 2018 claim that he had “Funding Secured” to take Tesla private at $420 a share, even though no such deal materialized and Tesla remains a publicly traded company.

The SEC fined Musk $40 million in 2018 as a result, and forced him to step down as chair of Tesla’s board. Now, he’s getting sued by investors who owned stock over a 10-day period (August 7th–17th) claiming the tweet cost investors “billions.”

In federal court in San Francisco on Monday, the plaintiff’s lawyer asked Musk if he chose the $420 per share price because it was a joke he thought his girlfriend would enjoy. Musk said that was not the case.

“420 was not chosen because of a joke,” Musk said. “It was chosen because there was a 20% premium over the stock price.”

Musk acknowledged that the actual Tesla stock price after adding a 20% premium totaled $419 and more than 50 cents, and explained that he rounded the number up to $420. It was “a coincidence,” he said. Pressed by the plaintiff’s lawyer about whether he believed his “girlfriend” — presumably the famous DJ Claire Elise Boucher otherwise known as Grimes, with whom Musk has two children — “would find it funny,” Musk said he wasn’t sure.

“I don’t know if she found it funny or not. But the 420 price was not a joke,” Musk said.

“There is some karma around 420,” Musk noted moments later, “although I should question if that is good or bad karma at this point.”

In April, the judge presiding over this case determined that Musk’s tweets were false. Now, there’s a jury that will rule on the extent of any damages, whether Musk acted deliberately, and whether the statements affected Tesla’s share prices.