The boards at the California Public Employees’ Retirement System and the California State Teachers’ Retirement System are facing campaigns from groups that want them to pull money out of companies associated with the Trump administration, scale back investments in fossil fuels and break with private equity firms over their labor records.

The list includes electric car maker Tesla, surveillance company Palantir, private companies that operate immigrant detention centers, ExxonMobil, Chevron and private equity firm Apollo Global Management.

To some extent, divestment campaigns are routine business at CalPERS and CalSTRS, which hold assets worth a combined $1 trillion and are headquartered in the capital of a deep blue state. 

But the combination of Trump-era politics and a concerted push by labor in the Legislature to force the pension funds to open the books on private equity holdings is attracting the focus of a more diverse mix of advocates.

“It’s politics,” said Richard Costigan, a Republican who served on the CalPERS board from 2011 to 2019 as an appointee of Democratic Gov. Jerry Brown. “When you look at Palantir and Tesla, it’s driven by politics. Seriously, why would you not invest in Palantir?”

The rebuttal: Despite their earnings and stock value today, the companies affiliated with the Trump administration’s immigration enforcement program are taking on serious reputational risk that could backfire on the funds. Separately, they say putting money into fossil fuel companies poses hazards both for the environment and for pension systems banking on long-term investments.

The pension funds “should be aligning their investments with the values of their state, the values of their members, and the long-term interests of their members,” said Richard Brooks, the climate finance program director at the advocacy organization Stand.Earth.

He recently released a study tallying CalPERS and CalSTRS investments in companies that participate in the Trump administration immigration sweeps, such as Palantir and private prison companies CoreCivic and GeoGroup. 

“I see a disconnect right now,” he said.  

Staff at CalPERS and CalSTRS oppose divestment and they consistently fight legislation that would tie their hands. Both systems are underfunded and owe tens of billions more than their assets, a crisis that in 2012 led the Legislature and then-Gov. Jerry Brown to pass a law mandating less generous pension benefits for employees hired after that year. 

But CalPERS and CalSTRS have pulled money out of industries in the past. CalPERS divested from firearms in 2013 and from tobacco in 2016. They’re also barred by state law from investing in coal as well as in businesses connected to Iran.

They’re governed by boards of directors that are made up of public employee union leaders, appointees of state Democratic leaders and the state controller and state treasurer, both of whom are Democrats. 

In short, they’re people who are aligned politically with the mostly liberal groups that are pressing them to change policies. 

That doesn’t mean it’s an easy call for them to withdraw investments from any industry.

“It’s so tricky. How do you divest from all of that is anti-union? The quick answer is you can’t,” said Kenny Waggoner of Ducenta Squared Asset Management, who advises union benefit plans.

He gave an example of a real estate investment trust with stakes in large warehouses — the kind operated by Amazon. Members might question an investment in a company with a reputation for fighting unionization, but the rent from the warehouse might be the best return available to support their pensions.

Here’s a look at the main friction points before CalPERS and CalSTRS.

Tesla volatility

A long–running campaign to persuade CalPERS to break with electric car maker Tesla peaked in September when the pension board commissioned a risk assessment on whether it should own stock in the electric car maker.

Tesla delivered returns for CalPERS over time. It’s considered one of the “magnificent seven” tech stocks that drive markets today.  

The company’s critics characterize it as a volatile risk under Trump ally Elon Musk, pointing to Tesla’s drop in sales last year along with regulatory challenges it’s facing with its self-driving cars. CalPERS as a Tesla shareholder has consistently voted against Musk’s pay packages.

“Tesla’s past gains don’t erase the present picture,” CalPERS board Mulissa Willette said at the meeting where she requested the risk analysis. 

In March, the board held a closed-door discussion on “owning Tesla”. Afterward, a board member said in open session that CalPERS would not sell off its holdings in the company. 

“While we are unable to provide specifics regarding the discussion, we can note that the company has been one of the top 10 drivers of performance in our global equity portfolio and is a key holding for our climate transition portfolio,” CalPERS board member Kevin Palkki said. “After our closed session discussion, we collectively agreed to make no changes at this time.” 

Immigration and surveillance

Palantir, a California company that supported the U.S. military during the wars in Iraq and Afghanistan, became a focus of public pension divestment campaigns during Israel’s assault on Gaza because of its work with the Israeli Ministry of Defense. The Berkeley Unified School District, for example, in September passed a resolution calling on CalSTRS to divest from the company. 

Now Palantir is facing more scrutiny because of its work with the Department of Homeland Security, which is carrying out the Trump administration’s immigration crackdown.

The climate advocacy organization Stand.Earth called attention to CalPERS’ and CalSTRS’ holdings in Palantir and six other companies working with Homeland Security in a study it published last month highlighting public pension investments in companies that Stand.Earth described as enabling “repression and violence”.

Fossil fuels

California lawmakers were close to forcing CalPERS and CalSTRS to divest from fossil fuels three years ago when a bill to do that passed the state Senate. But it didn’t become law.

Both of the big pension funds opposed the bill, although one of their board members, state Treasurer Fiona Ma, supported it.

Advocates and public employees who don’t want their pensions to support industries that drive climate change have pressed the funds to divest from oil and gas for a decade. 

California’s third largest public pension fund, the University of California Retirement Plan, divested from fossil fuels in 2020. At the time, its leaders cited financial reasons, finding that fossil fuels have a poor long-term outlook.

The UC Retirement Plan is in better shape than CalPERS and CalSTRS. The UC plan’s assets are worth 92% of what it owes over time to its beneficiaries, while CalPERS’ and CalSTRS’ portfolios are worth about 80% of what they owe.

Labor’s attention on private equity

Two bills in the Legislature this spring pit unions against unions in questions over how CalPERS and CalSTRS should do business. 

One would compel the funds to release more information about their private equity holdings, a change that CalPERS staff contends would so severely undermine its ability to invest with those firms that it would have to increase its charges to employers by more than $6.1 billion a year. 

The measure by Democratic Sen. Dave Cortese of San Jose has support from unions that represent grocery store workers and hotel employees, none of whom have pensions in CalPERS or CalSTRS. Public sectors have not yet taken a stand on the proposal  

The second one, carried by Democratic Assemblymember Robert Garcia, would direct the funds to commission a study on their labor standards for construction and development projects. The State Building and Construction Trades Council has urged CalPERS and CalSTRS to heighten their existing labor standards and is supporting the bill.

The California School Employees Association, whose members have CalPERS pensions, is on the record opposing the trades’ bill. 

“CSEA’s position is that investment and divestment decisions regarding CalPERS funds should be made by the CalPERS Board and its investment professionals, not by the Legislature,” Aaron Latham, the union’s spokesperson, said in a written statement. 

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The firm has discussed the feasibility of a tie-up between SpaceX and Tesla, an idea that some investors are pushing, the people said, asking not to be identified as the information isn’t public. Separately, they are also exploring a tie-up between SpaceX and xAI ahead of an IPO, some of the people said.

Any transaction could attract sizable interest from infrastructure funds and Middle Eastern sovereign investors, some of the people said. A deal could also potentially require a large financing component, one of them said.

No final decisions have been made, details could change and the companies could decide to remain separate, the people said. Musk and representatives for SpaceX, xAI and Tesla didn’t immediately respond to requests for comment.

Different parts of Musk’s grand vision for SpaceX — of the company putting data centers into space to do complex computing for AI — would potentially be served by the various scenarios. xAI could benefit enormously from computing capacity provided by SpaceX’s data centers in orbit, if the company can make the engineering work.

Tesla’s ability to manufacture energy storage systems could help SpaceX use solar energy in space to run the data centers. Musk has also discussed using SpaceX’s Starship rockets to carry Tesla’s Optimus robots to the moon as well as to Mars.

Tesla shares jumped as much as 4.5% in after-hours trading on Thursday. The stock had fallen 3.5% during normal hours, giving the company a market value of about $1.56 trillion. SpaceX is targeting an IPO that would value the company at about $1.5 trillion, Bloomberg News has reported.

Two legal entities with the phrase “merger sub” in their names were set up in Nevada on Jan. 21 that count SpaceX Chief Financial Officer Bret Johnsen as officers, Nevada’s business portal shows.

Reuters reported the potential merger between SpaceX and xAI earlier. Shares of xAI would be exchanged for shares in SpaceX, Reuters said, citing a person familiar with the matter.

Some xAI executives may have the option to receive cash instead ‍of SpaceX stock as part of the merger, Reuters said.

SpaceX is weighing a June listing, around Musk’s birthday, and could seek to raise as much as $50 billion, people familiar with the matter have said. That would make it the biggest IPO of all time. Bank of America Corp., Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley are expected to have senior roles.

Robinhood Markets Inc., the upstart broker credited with getting young people hooked on trading, is vying for a key role in SpaceX’s blockbuster initial public offering, Bloomberg News reported Wednesday.

SpaceX’s Johnsen told employees in December that a potential IPO would help fuel an “insane flight rate” for its developmental Starship rocket and a possible base on the moon.

Ludlow , Nair, Grush and Porter write for Bloomberg.

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Even when compared with other CEOs, who routinely get paid roughly 200 times more than their typical employees, Elon Musk’s pay package was eye-opening.

A judge in Delaware on Tuesday struck down the package that Tesla established for Musk in 2018, ruling that the process was “flawed” and the price “unfair.” Chancellor Kathaleen St. Jude McCormick called the package “the largest potential compensation opportunity ever observed in public markets by multiple orders of magnitude.”

So, if Musk isn’t worth the maximum $55.8 billion value of the package, how much is he worth? It’s a thorny question without an easy answer in the notoriously complex world of executive compensation.

McCormick’s ruling bumped Musk out of the top spot on the Forbes list of wealthiest people. The magazine on Wednesday lopped $25 billion off his net worth, reducing it to $185.3 billion, putting him behind fashion and cosmetics magnate Bernard Arnault and family.

Critics have argued for years that CEO pay packages are exorbitant. The median compensation for a CEO of an S&P 500 company was valued at $14.8 million, according to the latest AP CEO pay survey for 2022 conducted with the executive compensation research firm Equilar. It would take the typical worker at one of those companies more than 185 years to earn what their chief executive reaped in just 12 months.

In 2018, Tesla estimated the value of Musk’s compensation package at $2.28 billion, topping the previous highest package of $1.39 billion given to Blackstone’s Steven Schwarzman 10 years earlier, according to Equilar. The value of Musk’s package has grown as Tesla’s stock price increased. By comparison, in 2022 the median worker at Tesla made $34,084.

Under Musk’s pay plan, he received a chunk of stock options each time Tesla’s market value rose by $50 billion. Ultimately, he would have the chance to buy nearly 304 million shares for $23.34 each. Tesla has met each of the performance hurdles since the package was awarded. Its stock is trading at roughly $191 compared with $21 at the start of 2018.

The judge determined that Tesla’s board lacked independence from Musk. His lawyers said the package needed to be rich to give Musk an incentive not to leave — a line of reasoning the judge shot down.

“Swept up by the rhetoric of ‘all upside,’ or perhaps starry eyed by Musk’s superstar appeal, the board never asked the $55.8 billion question: ‘Was the plan even necessary for Tesla to retain Musk and achieve its goals?’” McCormick wrote.

Musk’s fans would argue that he shouldn’t be paid like other CEOs because he isn’t like other CEOs. He and Tesla are practically inseparable, so keeping him as CEO is key to the company’s growth. He built the company from an idea to the most valuable automaker in the world, last year selling more electric vehicles than any other company. His star power gets free publicity, so the company spends little on advertising. And he has forced the rest of the auto industry to accelerate plans for electric vehicles to counter Tesla’s phenomenal growth.

To figure out how much to pay their CEO, corporate boards often start by looking at how much their rivals are paying theirs: They need to pay enough to attract and keep the talent.

General Motors, for example, considers executive salaries at 3M, Boeing, Ford, IBM and other huge companies, and uses complex formulas to determine CEO compensation. For GM CEO Mary Barra, part of that depends on how GM’s stock return compares to its peers and how much progress the company makes on electric vehicles.

In 2022, Barra earned total compensation that GM valued at $29 million. That included $2.1 million in salary. Ford CEO Jim Farley’s compensation was valued at $22 million that year.

Even though Tesla makes automobiles, investors often lump its stock in with Big Tech stocks. They’re the companies disrupting industries and people’s ways of life.

Plus, Musk is closely identified with Tesla the way Meta Platforms’ Mark Zuckerberg or Apple’s Tim Cook are with their companies. Pay packages at Big Tech companies are among the largest in the U.S.

Cook’s compensation was valued at $63.2 million for 2023, mainly due to stock awards valued at nearly $47 million. A year earlier, he earned total compensation valued at roughly $99 million.

In the nuanced world of executive compensation, these numbers don’t indicate how much a CEO actually takes home, they’re just an estimate of the compensation package’s value. The final value may exceed or fall far below those figures because it is tied to stock.

Corporate law experts say any new compensation package for Musk will likely be challenged in court unless Tesla’s board either resigns en masse or follows a meticulous process to protect shareholders by passing a substantially smaller package.

“This is just a mess for them,” said Charles Elson, a retired corporate law professor and founder of the corporate governance center at the University of Delaware. “They kowtowed to this apparent superstar with poor results.”

Elson, who has followed the court for more than three decades, said this is the first time he can remember a judge invalidating an executive compensation plan at a public company.

Lawyers for Musk and the directors had countered that the plan was fairly negotiated by a compensation committee whose members were independent, and that it was blessed by a shareholder vote.

Shareholders who approved Musk’s deal, Elson said, were unaware that Musk essentially was negotiating with himself. “If the shareholders were aware of that, they may well have not approved it.”

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DETROIT (AP) — Tesla’s recall of more than 2 million of its electric vehicles — an effort to have drivers who use its Autopilot system pay closer attention to the road — relies on technology that research shows may not work as intended.

Tesla, the leading manufacturer of EVs, reluctantly agreed to the recall last week after a two-year investigation by the U.S. National Highway Traffic Safety Administration found that Tesla’s system to monitor drivers was defective and required a fix.

The system sends alerts to drivers if it fails to detect torque from hands on the steering wheel, a system that experts describe as ineffective.

Government documents filed by Tesla say the online software change will increase warnings and alerts to drivers to keep their hands on the steering wheel. It also may limit the areas where the most commonly used versions of Autopilot can be used, though that isn’t entirely clear in Tesla’s documents.

NHTSA began its investigation in 2021, after receiving 11 reports that Teslas that were using the partially automated system crashed into parked emergency vehicles. Since 2016, the agency has sent investigators to at least 35 crashes in which Teslas that were suspected of operating on a partially automated driving system hit parked emergency vehicles, motorcyclists or tractor trailers that crossed in the vehicles’ paths, causing a total of 17 deaths.

But research conducted by NHTSA, the National Transportation Safety Board and other investigators show that merely measuring torque on the steering wheel doesn’t ensure that drivers are paying sufficient attention. Experts say night-vision cameras are needed to watch drivers’ eyes to ensure they’re looking at the road.

“I do have concerns about the solution,” said Jennifer Homendy, the chairwoman of the NTSB, which investigated two fatal Florida crashes involving Teslas on Autopilot in which neither the driver nor the system detected crossing tractor trailers. “The technology, the way it worked, including with steering torque, was not sufficient to keep drivers’ attention, and drivers disengaged.”

In addition, NHTSA’s investigation found that out of 43 crashes it examined with detailed data available, 37 drivers had their hands on the wheel in the final second before their vehicles crashed, indicating that they weren’t paying sufficient attention.

“Humans are poor at monitoring automated systems and intervening when something goes awry,” said Donald Slavik, a lawyer for plaintiffs in three lawsuits against Tesla over Autopilot. “That’s why the human factors studies have shown a significant delayed response under those conditions.”

Missy Cummings, a professor of engineering and computing at George Mason University who studies automated vehicles, said it’s widely accepted by researchers that monitoring hands on the steering wheel is insufficient to ensure a driver’s attention to the road.

“It’s a proxy measure for attention and it’s a poor measure of attention,” she said.

A better solution, experts say, would be to require Tesla to use cameras to monitor drivers’ eyes to make sure they’re watching the road. Some Teslas do have interior-facing cameras. But they don’t see well at night, unlike those in General Motors or Ford driver monitoring systems, said Philip Koopman, a professor at Carnegie Mellon University who studies vehicle automation safety.

Koopman noted that older Teslas lack such cameras.

Tesla’s recall documents say nothing about increased use of cameras. But the company’s software release notes posted on X, formerly Twitter, say that a camera above the rearview mirror can now determine whether a driver is paying attention and trigger alerts if they aren’t. Tesla, which has no media relations department, didn’t answer emailed questions about the release notes or other recall-related issues.

Tesla’s website says that Autopilot and more sophisticated “Full Self Driving” software cannot drive themselves and that drivers must be ready to intervene.

Experts say that although limiting where Autopilot can operate to controlled access highways would help, it’s unclear whether Tesla will do so with its recall.

In the recall documents it filed with NHTSA, Tesla says its basic Autopilot includes systems called Autosteer and Traffic Aware Cruise Control. The documents say that Autosteer is intended for use on controlled access highways and won’t work when a driver activates it under the wrong conditions. The software update, the documents say, will have “additional checks upon engaging Autosteer and while using the feature outside controlled access highways and when approaching traffic controls.”

Cummings noted that doesn’t specifically say Tesla will limit areas where Autopilot can work to limited-access freeways — a concept known as “geofenced.”

“When they say conditions, nowhere does that say geofenced,” she said.

Kelly Funkhouser, associate director of vehicle technology for Consumer Reports, said she was able to use Autopilot on roads that weren’t controlled access highways while testing a Tesla Model S that received the software update. But it’s difficult, she said, to test everything else in the recall because Tesla has been vague on exactly what it’s changing.

Homendy, the chairwoman of the transportation safety board, said she hopes NHTSA has reviewed Tesla’s solution to determine whether it does what the agency intended it to do.

The NTSB, which can make only recommendations, will investigate if it sees a problem with Teslas that received the recall repairs, Homendy said.

Veronica Morales, NHTSA’s communications director, said the agency doesn’t pre-approve recall fixes because federal law puts the burden on the automaker to develop and implement repairs. But she said the agency is keeping its investigation open and will monitor Tesla’s software or hardware fixes to make sure they work by testing them at NHTSA’s research and testing center in Ohio, where it has several Teslas available.

The agency received the software update on its vehicles only a few days ago and has yet to evaluate them, Morales said. The remedy must also address crashes on all roads, including highways, the agency said.

Cummings, a former NHTSA special adviser who is set to be an expert witness for the plaintiff in an upcoming Florida lawsuit against Tesla, said she expects Tesla’s warnings to deter a small number of drivers from abusing Autopilot. But the problems for Tesla, Cummings said, won’t end until it limits where the system can be used and fixes its computer vision system so it better detects obstacles.

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The U.S. Justice Department has requested documents from Tesla related to its Autopilot and “Full Self-Driving” features, according to a regulatory filing.

“To our knowledge no government agency in any ongoing investigation has concluded that any wrongdoing occurred,” Tesla said in the filing Tuesday with the Securities and Exchange Commission.

The Austin, Texas, electric vehicle maker cautioned that if the government decides to pursue an enforcement action, it could possibly have a material adverse impact on its business.

Messages were left Tuesday seeking comment from the Justice Department and from Tesla, which has disbanded its media relations department.

Tesla Inc. is already facing multiple investigations by the National Highway Traffic Safety Administration for problems with its two driver-assist systems, Autopilot and “Full Self-Driving.”

Despite their names, Tesla still says on its website that the cars can’t drive themselves. Teslas using “Full Self-Driving” can navigate roads in many cases, but experts say the system can make mistakes, which even CEO Elon Musk acknowledges. “We’re not saying it’s quite ready to have no one behind the wheel,” CEO Musk said in October.

Michael Brooks, executive director of the nonprofit Center for Auto Safety, said the Justice Department could be looking at safety issues with the systems, or it could be investigating Tesla claims that the cars can drive themselves when they can’t.

“When you get the car, it really can’t do everything that’s been promised,” Brooks said. “Tesla is putting a vehicle out on the road that is unable to perform to the capabilities claimed. Yet we have drivers relying on those promises and esentially not paying attention to the drive because they think it is more capable than it is.”

The systems have been under investigation by NHTSA since June of 2016 when a driver using Autopilot was killed after his Tesla went under a tractor-trailer crossing its path in Florida. A separate probe into Teslas that were using Autopilot when they crashed into emergency vehicles started in August 2021. At least 14 Teslas that have crashed into emergency vehicles while using the Autopilot system.

Including the Florida crash, NHTSA has sent investigators to 35 Tesla crashes in which automated systems are suspected of being used. Nineteen people have died in those crashes, including two motorcyclists.

The agency also is investigating complaints that Teslas can brake suddenly for no reason.

“Full Self-Driving” went on sale late in 2015, and Musk has used the name ever since. It currently costs $15,000 to activate the system. Tsl

In 2019 he promised a fleet of autonomous robotaxis by 2020, and he said in early 2022 that the cars would be autonomous that year.

Since 2021, Tesla has been beta-testing “Full Self-Driving” using owners who haven’t been trained on the system but are actively monitored by the company. Tesla said this month that 400,000 owners are participating.

Auto safety advocates and government investigators have long criticized Tesla’s monitoring system as inadequate. Three years ago the National Transportation Safety Board listed poor monitoring as a contributing factor in a 2018 fatal Tesla crash in California. The board recommended a better system, but said Tesla has not responded.

NHTSA has noted in documents that numerous Tesla crashes have occurred in which drivers had their hands on the wheel but still weren’t paying attention. The agency has said that Autopilot is being used in areas where its capabilities are limited and that many drivers aren’t taking action to avoid crashes despite warnings from the vehicle.

In addition, the National Transportation Safety Board determined in 2020 that Tesla’s system to make sure drivers are paying attention is not adequate, and it should be limited to areas where it can safely operate.

Tesla shares were up just under 4% in Tuesday morning trading.

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SAN FRANCISCO (AP) — Elon Musk returned to federal court to defend himself against a class-action lawsuit that alleges he misled Tesla shareholders with a tweet about an aborted buyout that the billionaire defiantly insisted Tuesday he could have pulled off, had he wanted.

Musk spent roughly three more hours on the stand during his third day of testimony before being excused by U.S. District Judge Edward Chen. It’s unlikely Musk, 51, will be summoned back to the witness stand during a civil trial expected to be turned over to a nine-person jury in early February.

Musk, who also owns Twitter while continuing to run Tesla, spent much of Tuesday depicting himself, while being questioned by his own attorney, Alex Spiro, as an impeccably trustworthy business leader capable of raising as much money as he needs to pursue his visions. He testily sparred with a shareholder lawyer, Nicholas Porritt, who had raised his ire earlier in the trial.

At two separate junctures Tuesday under Spiro’s gentle prodding, Musk left no doubt about his contempt for Porritt with a remark expressing doubt that the lawyer was looking out for the best interests of Tesla shareholders. The remarks drew a quick rebuke from the judge and were stricken from the record. “It’s inappropriate,” Chen at one point admonished Musk.

When he was being challenged by Porritt, Musk purposefully diverted his gaze from the lawyer and delivered his explanations while looking directly at the jurors sitting a few feet to his right. In another instance, Musk asserted, without elaborating, that a question from Porritt wondering if he had ever caused investors to suffer losses contained “falsehoods.”

On the flip side, Spiro at one point mistakenly addressed Musk as “your honor” while asking the billionaire how much money he had made for investors during his career. The slipup elicited a moment of levity in the San Francisco courtroom filled with media and other spectators in attendance to listen to Musk, who has become even more famous since completing his $44 billion purchase of Twitter in October.

The current trial hinges on whether a pair of tweets Musk posted on Aug. 7, 2018, damaged Tesla shareholders during a 10-day period leading up to his admission that the buyout he had envisioned wasn’t going to happen. The statements resulted in Musk and Tesla to reach the $40 million settlement without acknowledging any wrongdoing.

In the first of the 2018 tweets, Musk stated “funding secured” for what would have been a $72 billion — or $420 per share — buyout of Tesla at a time when the electric automaker was still grappling with production problems and was worth far less than it is now. Musk followed up a few hours later with another tweet suggesting a deal was imminent.

After those tweets, Musk declared Tesla would remain publicly a few weeks later. A month after that, Musk and Tesla reached a $40 million settlement with securities regulators who had alleged the tweets were misleading.

Musk has previously contended he entered into the settlement under duress and maintained he never wavered in his belief that he had the money for a deal.

Musk spent most of Tuesday trying to persuade the jurors that there was nothing devious about the two tweets indicating he had lined up the money to take Tesla private as the electric automaker was struggling with production problems and was worth far less than it is now. The judge has already declared the jurors can consider those two tweets to be false, leaving them to decide whether Musk deliberately deceived investors and whether his statements saddled them with losses.

While being steered by Spiro, Musk told jurors he had stated only that he was “considering” a Tesla buyout but never promised a deal would get done. But, Musk said, he thought it important to get the word out to investors that Tesla might be poised to end its eight-year run as a publicly held company.

“I had no ill motive,” Musk said. “My intent was to do the right thing for all shareholders.”

While being grilled the day before by Porritt, Musk at times was combative, indignant and exasperated. Through it all, Musk has insisted he locked up financial backing for what would have been a $72 billion buyout of Tesla during 2018 meetings with representatives from Saudi Arabia’s Public Investment Fund, although no specific funding amount or price was discussed.

When presented with texts and email indicating that a representative for the Saudi fund had never pledged the money for a full buyout of Tesla, Musk contended it was nothing more than the words of someone trying to backpedal from a previous pledge made in private conversations.

Not long after Porritt resumed his questioning Tuesday, Musk once again scoffed at the notion that his belief that he had the Saudi funding’s financial backing wasn’t enough for him to tweet about a potential Tesla buyout.

“We are talking about the kingdom of Saudi Arabia,” Musk testified. “They can buy Tesla several times over. This was not a large amount of money for them.”

Musk also reiterated earlier testimony that he could finance a Tesla buyout by sharing some of his holdings in SpaceX, a privately held maker of rocket ships that he also started. That would be similar to what he did in the Twitter purchase, which led him to sell about $23 billion of his Tesla stock.

That’s something that Musk said Tuesday that he didn’t want to do, but that it showed he had the wherewithal to pull together purchases for expensive deals. Musk’s ownership of Twitter also has proved unpopular with Tesla shareholders who worry about him being distracted as the automaker faces more competition. Tesla’s stock has lost about one-third of its value since Musk took over Twitter.

Despite that downturn, the stock is still worth about seven times more than at the time of Musk’s 2018 tweets, after adjusting for two splits that have since occurred. That opened the door for Musk to remind jurors Tuesday that any investor who held Tesla shares in August 2018 would have done “extremely well,” had they just held on to the stock.

“It would have been the best investment in the stock market,” Musk said.

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SAN FRANCISCO (AP) — Elon Musk returned to federal court Monday in San Francisco, testifying that he believed he had locked up financial backing to take Tesla private during 2018 meetings with representatives from Saudi Arabia’s Public Investment Fund — although no specific funding amount or price was discussed.

The 51-year-old billionaire Tesla CEO and Twitter owner is facing a class action lawsuit filed by Tesla investors alleging he misled them with a tweet saying funding was secured to take his electric car company private — for $420 per share.

But the deal never came close to happening, and the tweet resulted in a $40 million settlement with securities regulators.

The trial hinges on the question of whether a pair of tweets that Musk posted on Aug. 7, 2018, damaged Tesla shareholders during a 10-day period leading up to Musk’s admission that the buyout he had envisioned wasn’t going to happen.

Speaking in a soft halting tone, Musk said Monday he “had trouble sleeping last night and unfortunately I am not at my best.” He added that it was important for jurors to know that he “felt that funding was secured” due to his ownership of “SpaceX stock alone.”

“Just as I sold stock in Tesla to buy Twitter. … I didn’t want to sell Tesla stock but I did sell Tesla stock,” he said of the sale to make up for lack of funding from other sources for his $44 billion deal to take Twitter private. Musk sold nearly $23 billion worth of his car company’s shares between last April, when he started building a position in Twitter, and December.

“My SpaceX shares alone would have meant that funding was secured,” Musk said of the 2018 tweets.

Even before Musk first took the stand on Friday, U.S. District Judge Edward Chen had declared that jurors can consider those two tweets to be false, leaving them to decide whether Musk deliberately deceived investors and whether his statements saddled them with losses.

Musk has previously contended he entered into the Securities and Exchange Commission settlement under duress and maintained he believed he had locked up financial backing for a Tesla buyout during meetings with representatives from Saudi Arabia’s Public Investment Fund.

At a July 31, 2018 meeting, the Saudi Public Investment Fund’s Yasir Al-Rumayyan “confirmed unequivocally that they would support Tesla going private. That was part of what ‘funding secure’ meant,” Musk said Monday. “But in addition there was SpaceX stock, which could also be used.”

In the first of the 2018 tweets, Musk stated “funding secured” for what would have been a $72 billion — or $420 per share — buyout of Tesla at a time when the electric automaker was still grappling with production problems and was worth far less than it is now. Musk followed up a few hours later with another tweet suggesting a deal was imminent.

Nicholas Porritt, a lawyer representing Tesla shareholders, asked Musk if he “went with 420 because it was a joke your girlfriend enjoys.” Musk replied he thinks there is “some karma” around the number 420 — which is also a slang reference to marijuana — although he added he doesn’t know “if it’s good karma or bad karma at this point.”

He then said the number was a “coincidence” and it represented a 20% premium of Tesla’s share price at the time.

After it became apparent that the money wasn’t in place to take Tesla private, Musk stepped down as Tesla’s chairman while remaining CEO as part of the SEC settlement, without acknowledging wrongdoing.

On Friday, Musk had testified he thinks it is possible to be “absolutely truthful” on Twitter. “But can you be comprehensive? Of course not.”

On Monday, he again emphasized: “My tweet was truthful, absolutely truthful.”

Asked by his lawyer, Alex Spiro, if he understood the charges against him, Musk said he’s being “accused of fraud. It’s outrageous.”

Shares of Tesla climbed $8.76. or 6.6%, to $142.18 on Monday. He said he never deceived investors.

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Elon Musk has sold nearly $7 billion worth of shares in Tesla as the billionaire gets his finances in order ahead of his court battle with Twitter.

Musk disclosed in series of regulatory filings that he unloaded about 8 million shares of his company Tesla Inc. in recent days.

“In the (hopefully unlikely) event that Twitter forces this deal to close and some equity partners don’t come through, it is important to avoid an emergency sale of Tesla stock,” Musk tweeted late Tuesday.

Musk is by far the largest individual shareholder in both Tesla and Twitter.

Shares of Tesla rose 4% to close Wednesday at $883.07. Shares of Twitter Inc. jumped 3.7% to close at $44.43, and are up 36% since July 11, with most believing Musk faces long-shot odds of success in court.

Musk countersued Twitter last week, accusing the company of fraud over his aborted $44 billion acquisition. He claimed that Twitter held back critical information and misled his team about the size of its user base.

Musk alleges that Twitter committed fraud, breach of contract and violation of a securities law in Texas, where Musk lives.

Musk offered to buy Twitter earlier this year, then tried to back out of the deal claiming the social platform was infested with a larger numbers of “spam bots” and fake accounts than Twitter had disclosed.

Musk said in the spring that he planned no major sales of his stake in Tesla after lining up financing to acquire Twitter, but Dan Ives, an industry analysts with Wedbush, said Wednesday that “the situation has dramatically changed.”

Wedbush raised it’s target price for shares of Twitter, “With the chances of a Twitter deal now more likely in our opinion and the Street seeing through this poker move by Musk,” Ives wrote to clients.

“We can also see Musk trying to resolve this powder keg situation before the Twitter deal officially heads to court in October,” Ives wrote. “At a minimum, we see Twitter getting a massive settlement from Musk in the $5 billion to $10 billion range that is starting to be factored into the stock.”

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DETROIT (AP) — Elon Musk has sold 4.4 million shares of Tesla stock worth roughly $4 billion, most likely to help fund his purchase of Twitter.

Musk reported the sale in a filing with the Securities and Exchange Commission on Thursday. The shares were sold over the past few days, at prices ranging from $872.02 to $999.13.

The world’s richest man, who is the CEO of Tesla, tweeted that he doesn’t plan any further sales of the company’s shares.

Most of the sales took place on Tuesday, when Tesla shares closed down 12%, a huge single-day drop.

Analysts said Tesla investors fear Musk will be distracted by Twitter and less engaged in running the electric car company. Twitter agreed to be acquired by Musk on Monday for $44 billion.

It appeared that Musk would borrow up to $25.5 billion from a slew of banks to pay for the takeover of Twitter, but the stock sale potentially could fund some of that.

The deal to buy Twitter at $54.20 per share was announced earlier this week and is expected to close sometime this year. But before the deal is completed, shareholders will have to weigh in. So will regulators in the U.S. and in countries where Twitter does business.

So far though, few hurdles are expected, despite objections from some of Twitter’s own employees and from users who worry about Musk’s stance on free speech and what it might mean for harassment and hate speech on the platform.

Tesla shares closed Thursday down slightly at $877.51. They are down 17% so far this year.

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DETROIT (AP) — A group of Tesla shareholders suing CEO Elon Musk over some 2018 tweets about taking the company private is asking a federal judge to order Musk to stop commenting on the case.

Lawyers for stockholders of the Austin, Texas-based company also say in court documents that the judge in the case has ruled that Musk’s tweets about having “funding secured” to take Tesla private were false, and that his comments also violate a 2018 court settlement with U.S. securities regulators in which Musk and Tesla each agreed to pay $20 million fines.

Musk, during an interview Thursday at the TED 2022 conference, said he had the funding to take Tesla private in 2018. He called the Securities and Exchange Commission a profane name and said he only settled because bankers told him they would stop providing capital if he didn’t, and Tesla would go bankrupt.

The interview and court action came just days after Musk, the world’s richest person, made a controversial offer to take over Twitter and turn it into a private company with a $43 billion offer that equals $54.20 per share. Twitter’s board on Friday adopted a “poison pill” strategy that would make it prohibitively expensive for Musk to buy the shares.

In court documents filed Friday, lawyers for the Tesla shareholders alleged that Musk is trying to influence potential jurors in the lawsuit. They contend that Musk’s 2018 tweets about having the money to take Tesla private at $420 per share were written to maniuplate the stock price, costing shareholders money.

Now, lawyers say Musk is campaigning to influence possible jurors as the case gets closer to trial.

“Musk’s comments risk confusing potential jurors with the false narrative that he did not knowingly make misrepresentations with his Aug. 7, 2018 tweets,” the lawyers wrote. “His present statements on that issue, an unsubtle attempt to absolve himself in the court of public opinion, will only have a predjudicial influence on a jury.”

The lawyers asked Judge Edward M. Chen in San Francisco to restrain Musk from making further public comments on the issue until after the trial. Chen gave Musk’s lawyers until Wednesday to respond.

Alex Spiro, a lawyer representing Musk, wrote in an email Sunday that the plaintiffs’ lawyers are seeking a big payout. “Nothing will ever change the truth, which is that Elon Musk was considering taking Tesla private and could have,” he wrote. “All that’s left some half-decade later is random plaintiffs lawyers trying to make a buck and others trying to block that truth from coming to light, all to the detriment of free speech.”

But the shareholders’ lawyers wrote that Chen already ruled that Musk’s tweets were false and misleading, and “that no reasonable juror could conclude otherwise.”

Judge Chen’s order, issued April 1, was not in the public court file as of Sunday. Adam Apton, a lawyer for the shareholders, said it was sealed because it has evidence that Musk and Tesla say is confidential. It will stay sealed until the parties agree if anything should remain sealed, he wrote in an email. “Our motion for TRO (temporary restraining order) accurately desribes the issues decided by the court,” Apton wrote.

After Musk’s 2018 tweets, the SEC filed a complaint against him alleging securities law violations. Musk then agreed to the fine and signed the court agreement. Part of the agreement says that Musk “will not take any action or make or permit to be made any public statement denying, directly or indirectly, any allegation in the complaint or creating the impression that the complaint is without factual basis.”

If Musk violates the agreement, the SEC may ask the court to scrap it and restore the securities fraud complaint, the agreement says. A message was left Sunday seeking comment from the SEC.

Spiro, on behalf of Musk, already has asked a Manhattan federal court to throw out the agreement. He contends the SEC is using the pact and “near limitless resources” to chill Musk’s speech. Court documents filed by Spiro say Musk signed the agreement when Tesla was a less mature company and SEC action jeopardized its financing.

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