It took only a couple of tweets to plunge Elon Musk into the morass of a securities fraud trial that could cost him billions of dollars from his rapidly diminishing fortune.

The Tesla Inc. chief executive officer is set to be the star witness at a jury trial that starts Tuesday in San Francisco federal court over his infamous tweets 4 1/2 years ago about a plan to take the electric-car maker private with “funding secured.”

Lawyers for the shareholders will try to show jurors that Musk lied in the statement, and that it caused them deep losses from wild stock price swings over a 10-day period before the plan was abandoned. Musk’s defence team will work to tear down that narrative.

Losing a class-action case of this magnitude could put Musk on the hook for damages in the billions of dollars, according to Adam Pritchard, a professor at University of Michigan Law School.

“Elon enjoys a good fight,” Pritchard said. “He has a lot of money, and is apparently willing to take substantial risks with that money.”

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The trial comes as Musk’s wealth has dwindled from a peak of $340 billion in November 2021. He became the first person in history to lose more than $200 billion, all while he spent $44 billion to acquire Twitter Inc. Last month, he was dethroned as the world’s richest person and Tesla’s stock plummeted 37% since December 1, with the electric car maker facing increased competition and a looming recession.

The stir created by the August 2018 tweets is best remembered for throwing Musk into the orbit of the US Securities and Exchange Commission. It resulted in a pledge from Musk to have his future social media posts screened by a Tesla lawyer.

Investors must prove Musk knew his tweets were misleading, and that they were “material,” or important to a reasonable investor. Shareholders would also need to tie Musk’s tweets to their trading losses.

US District Judge Edward Chen has already hobbled Musk with a pretrial ruling that the tweets were reckless and false — and he will tell the 12-member jury to assume that from the get-go, to set the parameters of the trial.

That instruction to the jury puts Musk at a “huge disadvantage,” Pritchard said.

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To beat back the allegations he was deceitful, Musk has said in court filings he may call on others who can vouch for the take-private plan, including friend and confidant Larry Ellison, as well as executives at Goldman Sachs, Morgan Stanley and private-equity firm Silver Lake Management.

Musk’s lawyers have failed repeatedly to persuade Chen not to share his finding with the jury, saying as recently as last week that it could be “highly prejudicial” to the CEO’s defence.

A lawyer for Musk declined to comment before the start of the trial and an attorney for the shareholders didn’t respond to a request for comment.

Musk has insisted his short-lived plan to take Tesla private was solid based on discussions he had with Saudi Arabia’s sovereign wealth fund. He subpoenaed the governor of the Kingdom’s Private Investment Fund to testify at the trial, but withdrew the request after attorneys for Yasir Al-Rumayyan argued he isn’t legally obligated to show up.

It’s not clear that Al-Rumayyan would be all that helpful to Musk as a witness. Court filings revealed a text exchange in which the Tesla CEO said he thought they had reached a handshake agreement on funding to take the company private, but the Saudi official said he needed more information to make a decision.

Proving Musk’s state of mind will be nuanced and tricky. Ordinary investors understand that deals can get done even if they’re not 100% nailed down, Pritchard said. Musk might have believed in his ability to take Tesla private, even if he wasn’t across the finish line yet.

“Elon Musk is an achiever, he gets things done,” Pritchard said. “If he says he’s going to take Tesla private, in his mind he’s going to take Tesla private. Did you ever decide that you were going to put a rocket in space? Elon did. He did it. He believes in Elon. He’s a little crazy. Which is part of the secret of his success. He might believe that because he’s Elon Musk. ”

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