Tweet triggered price swings
Tesla boss Musk faces court defeat
With a tweet about a possible takeover of Tesla, Elon Musk causes price fluctuations and losses among investors. They are taking legal action against the alleged misrepresentations. A partial decision should have already been made.
A US judge has ruled that Tesla CEO Elon Musk’s tweet about his company being delisted was “false and misleading”. According to court filings, federal judge Edward Chen, in an unreported partial decision in the case between the electric car company and investors, found that Musk “recklessly and knowingly” disseminated false facts in 2018. .
The document is part of a lawsuit filed by investors against Tesla and Musk for securities fraud. They accuse Musk of triggering price swings and inflicting heavy losses on them with a Twitter post on August 7, 2018. In the tweet, Musk claimed that he “got” funding to take Tesla private at 420 $ per share.
Musk only insisted on Thursday that his statements at the time were correct. As a result, at the time, he was in talks with Saudi Arabia’s sovereign wealth fund to buy back all of Tesla’s shares and was confident that those negotiations could be concluded successfully. However, no deal was ever announced.
Problem with the stock exchange regulator
Investors are now asking the judge to bar Musk from repeating the allegations. The plaintiffs accuse Musk of promoting an “inconsistent and incorrect” interpretation of the tweet in question, which could skew a jury at a hearing scheduled for May.
In addition to the investor lawsuit, Musk had also gotten into trouble with the United States Securities and Exchange Commission via the tweet. They had also accused him of fraud. In a settlement, Musk eventually agreed to step down as chairman of Tesla’s board of directors and pay a $20 million fine.
He also pledged to require attorneys to pre-approve his tweets directly related to Tesla’s business. Musk challenged this latest measure in court in early March. He said on Thursday he was forced into a deal with the SEC to save Tesla. Musk is currently trying to buy Twitter himself.