Tesla Inc CEO Elon Musk "lied" when he said funding was "secured" to take the company private, a lawyer for company investors has claimed.
Tesla investor Glen Littleton is seeking damages on behalf of shareholders who traded the company's stock in the days after Musk posted his plan to take the company private on Twitter in August 2018.
During opening statements on Wednesday, lead lawyer for the investors Nicholas Porritt told a jury in San Francisco Musk's alleged lies caused "regular people" to lose millions.
"Millions of dollars were lost when his lies were exposed," he said.
Musk's lawyer disputed the characterisation, saying the billionaire was "serious" about taking the company private in 2018 but ultimately encountered shareholder opposition.
"You will come to learn very soon that this was not fraud, not even close," Alex Spiro said during opening statements.
Musk believed financing was not an issue and was "taking steps" to make a deal happen, Spiro told the jury.
While the tweets contained "technical inaccuracies," Musk was concerned some investors knew about his go-private plan and wanted to get the information out to the "everyday shareholder" that he "wanted to protect", Spiro said.
"In a rush, he used the wrong words," he said.
The case is a rare securities class action trial.
Musk and his company are bucking the norm of settling claims that clear high legal hurdles, making for a potentially dramatic trial, with Musk expected to take the stand as early as this week.
A jury of nine will decide whether the tweets artificially inflated Tesla's share price by playing up the status of funding for the deal and if so, by how much.
The defendants include current and former Tesla directors, whom Spiro said had "pure" motives in their response to Musk's plan.
Littleton on Wednesday told the court he began investing in Tesla in 2015 as Musk was "bringing new ideas to life" in the technology industry.
The self-employed investor said he viewed Musk's "funding secured" statement as "absolute".
Littleton said he scrambled to unwind his Tesla options positions, which the tweet made unprofitable.
Spiro said on Wednesday Tesla's stock price jumped in response to Musk saying he was considering taking the company private, which he said was true.
It did not jump on Musk's assertion about funding, Spiro said.
United States District Judge Edward Chen, who is overseeing the trial, has ruled Musk's statements about the status of the deal were false and Musk made them recklessly. The deal did not happen.
While shareholders sue hundreds of companies and their executives for alleged securities fraud every year, few of those cases make it to trial.
The vast majority are either dismissed by courts or settled.