Elon Musk has told a court that he believed he had enough backing to take Tesla private at the time he issued a controversial tweet.
The boss of the electric car company is on trial after investors claimed the 2018 tweet cost them millions of dollars when a deal did not go ahead.
Mr Musk claims that he had met with a Saudi Arabia sovereign wealth fund who indicated they would support a deal.
He added he would have sold his stake in rocket firm SpaceX to raise money.
Mr Musk is accused of defrauding investors after he tweeted on 7 August 2018 that he had “funding secured” to take Tesla private at $420 per share, and that “investor support is confirmed”.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
The tweet sent shares in Tesla soaring, but weeks later they fell back when Mr Musk said the plan was no longer going ahead, causing a significant backlash for the billionaire.
He was forced by the Securities and Exchange Commission, the US regulator, to step down as Tesla’s chairman and had to have any tweets related to Tesla vetted by an independent committee.
He and Tesla were also fined $20m each to settle a claim by the SEC that he had committed securities fraud.
On Monday, Mr Musk told a court in San Francisco that he had met with people from Saudi Arabia’s Public Investment Fund on 31 July, 2018.
He said that while a price for taking Tesla private was not discussed, he claimed that the representatives from the fund made it clear they backed a deal.
Mr Musk claimed Yasir Al-Rumayyan, the fund’s governor, then appeared to backpedal on the pledge.
“I was very upset because he had been unequivocal in his support for taking Tesla private when we met and now he appeared to be backpedaling,” he said.
‘Not a joke’
Mr Musk was also questioned about how he decided on a price of $420 a share and whether it was a reference to marijuana.
According to a filing by the SEC in 2018, Mr Musk had calculated the price by taking Tesla’s share price on a particular day and added a 20% premium. Based on that calculation, the price came to $419.
But, according to the SEC’s legal documents: “He rounded the price up to $420 because he had recently learned about the number’s significance in marijuana culture and thought his girlfriend ‘would find it funny, which admittedly is not a great reason to pick a price’.”
In American counterculture, 20 April is a day when thousands of people gather to celebrate marijuana. In the US, dates are written with number of the month first, then the day – in this case 4/20.
In court, Mr Musk said: “420 was not chosen because of a joke; it was chosen because there was a 20% premium over the stock price.
He added that there was “some karma around 420”, though “I should question whether that is good or bad karma at this point.”