Tesla boss Musk sued by investor over tweets
Posted On March 13, 2021
His tweets cause Tesla boss Elon Musk again legal trouble. An investor in the US electric car maker has sued him for “erratic” Twitter messages. They would expose the company to high legal risks and billions in price losses. Further unbridled tweets could have serious consequences for funding opportunities, according to the 105-page complaint published by the Delaware court on Friday.
Musk repeatedly causes a stir with tweets and sometimes also strong movements in the financial markets. Most recently, he had fueled the price rallies of cryptocurrencies such as Bitcoin and Dogecoin with benevolent messages in the short message service. This caused suspicion, not least because a little later a $ 1.5 billion Bitcoin purchase from Tesla became known, for which it is not clear whether it was made before or after the tweets. The whole thing is particularly explosive because Musk has already been sanctioned by the Securities and Exchange Commission in the past.
An agreement with the authority stipulates that the Tesla boss must have his tweets approved by the company. The trigger for this was Musk’s announcement on Twitter in the summer of 2018 that he was considering taking Tesla off the stock exchange and that the financing was secured. After an investigation, the SEC concluded that Musk had no firm funding commitments and ultimately enforced Twitter’s restrictions on a settlement after a legal hack and a market manipulation lawsuit. But Musk mocked the SEC and continued to tweet cheerfully.
In May 2020, for example, Musk dropped Tesla’s stock by more than ten percent in a single trading day in a series of weird tweets. At the time, he wrote, among other things, that he considered the company’s stock market value to be too high and announced that he wanted to dispose of almost all physical possessions. This is just one of the incidents that are now explicitly mentioned in the lawsuit – this alone “destroyed” almost $ 14 billion in market value.
In view of the recent successes and the stock market development of the e-car pioneer, the investor’s lawsuit may seem bold – Tesla’s shares rose by around 700 percent last year, and Musk’s group is by far the most valuable car manufacturer worldwide on the capital market. Recently, however, things went downhill again, with the price dropping by 15 percent last month. Because Tesla and its supervisory bodies allegedly did not bring Musk to reason as ordered by the SEC, the lawsuit is also directed against the company and its board of directors.