News JVTech Elon Musk: why is the head of Tesla sued for his tweets?
On Tuesday, January 17, Elon Musk appeared in court in San Francisco. If some of the billionaire’s tweets are at the center of the case, it’s actually about his relationship with Tesla. Explanations.
Long before I owned Twitter, Elon Musk was already very vocal on the social networkand some his tweets got him sued in San Francisco. From January 17 and for three weeks, Elon Musk has been on trial there for fraud. But that has nothing to do with him taking over Twitter.
Indeed, the businessman here, In 2018, Tesla was accused of manipulating the stock price posting a series of tweets discussing the company’s delisting. A job that could cost him dearly, with the billionaire expected to take the helm this Friday.
The $420 Tesla Stock Story
Tesla’s boss should know now: Posting on Twitter is no mean feat when you’re a billionaire with millions of followers. But it’s a little late to learn the lesson. In August 2018, Elon Musk posted a series of tweets to that effect he envisioned delisting Tesla, returning it to $420 per share.. He even added that the funding was “secure”.
Shareholders can either sell at 420 or keep the shares and privatize them
— Elon Musk (@elonmusk) August 7, 2018
This was the result of the declaration a sharp increase in the value of Tesla shares during that timebecause many buyers, attracted by the lure of profit, decided to buy: A jump to $386.48 but it didn’t last long: indeed, a few days later, Elon Musk stated in an interview with the New York Times that “$420 was a joke”. The stock later fell to $335.45, causing investors to lose millions.
“Elon Musk lied”
“Tesla’s (then) CEO Elon Musk lied and his lies cost people millions of dollars”, plaintiffs’ attorney Nicholas Porritt told a San Francisco court last Wednesday. It’s over A collective action by a group of investors decided to file a complaint about Musk for what they said he had “Tesla Artificially Manipulated Its Stock Price To Totally Destroy Investors”.
“Plaintiffs allege that the tweets were factually false and artificially influenced Tesla’s stock price and other securities.” in turn, Judge Edward Chen summarized for potential jurors. Observation of Elon Musk defending himself through his lawyer Alexander Spiro : for defense, the billionaire had ambitions to delist Tesla. It would be his main mistake “tweet too fast”After an article in the Financial Times revealed that a Saudi fund had bought a stake in Tesla.
The defense therefore relies on a tweet “careless”but not which one “not a scam”. He adds that during this period neither Elon Musk nor any other board member sold a single shareevidence, in his opinion, the purpose was not to use it.
A case that already has consequences for Elon Musk
The next two weeks will be decisive in this matter. However, we can already note that this has already led to great results for Elon Musk. Indeed, the SEC is the police of the Stock Exchange in the United States The billionaire was forced to step down as chairman of Tesla’s board of directors in 2018believing that he did not provide proof of his funding. He also had to pay $20 million fine and surround yourselfA team of lawyers around Tesla dedicated to validating his tweets.
Today, Elon Musk hopes that this trial will end with his innocence and will allow him to reclaim his seat on Tesla’s board of directors, but nothing says that will actually be his outcome.