Tesla CEO Elon Musk and some of the company’s shareholders will go on trial Tuesday in a case stemming from a 2018 tweet in which Musk claimed to take the company private, potentially the first in a series of major shareholder lawsuits to which Musk could face as Twitter shareholders. also filed a complaint against the billionaire for his takeover of the social media giant.
A lawsuit began in California on Tuesday after Tesla shareholders sued Musk over his 2018 tweet claiming he was ‘considering taking Tesla private’ and had the ‘funding secured’, which drove the stock price of the company to soar before falling when its claims did not actually soar. to anything and investors lost money.
Twitter shareholders also sued Musk in California in May after reaching a buyout deal with the company’s board, alleging Musk intentionally attempted to “significantly reduce Twitter stock” through tweets and public statements in order to withdraw or renegotiate the agreement. .
A second lawsuit filed in California in October similarly alleges that Musk used public statements and tweets to intentionally drive down Twitter’s stock price, this time targeting alleged “false and misleading statements.” from the CEO of Tesla as to whether or not he was going through with Twitter. agreement before it finally took place in October.
The class action lawsuit was filed on behalf of shareholders who lost money selling their shares when Musk caused the company’s share price to plummet by questioning the deal through his public statements. allegedly false, before he finally closed the deal and the stock price rallied. up.
A Twitter shareholder sued Musk in New York in April also on behalf of Twitter investors who had sold their shares, alleging that Musk failed to disclose his Twitter stake within the time limit set by the Securities Exchange Commission, which would have allowed him to buy more Twitter. shares at a lower price before he disclosed it and the price rose.
Twitter shareholder Luigi Crispo sued Musk in July for breach of contract in an effort to force him into the Twitter deal, and while much of the lawsuit was dismissed in October, some of the claims of Crispo continue to move forward.
Twitter’s four shareholder lawsuits against Musk are still pending, and the courts have yet to decide whether to dismiss the cases or move forward. In the Tesla lawsuit, Musk stands to lose billions of dollars that should be paid out to shareholders if he loses in court, Bloomberg notes. Opening statements for the trial are expected to begin as early as Tuesday, after jury selection. Musk has denied allegations against him in the Twitter lawsuits and the suggestion that he acted recklessly with his 2018 Tesla tweet.
$150.1 billion. That’s Musk’s net worth as of Tuesday, according to Forbes’ real-time net worth tracker, making him the second richest person in the world after Bernard Arnault, chairman and CEO of LVMH Moët Hennessy Louis Vuitton. , and his family. Musk’s fortunes have already taken a hit in recent months following his Twitter takeover, as he lost his status as the world’s richest person and saw his net worth fall below $200 billion in November. . The losses are linked to the fall in Tesla shares amid the Twitter deal, which raised concerns that Musk could be distracted from his duties as CEO of the company and forced him to sell 15.4 million dollars of Tesla stock to fund the $44 billion deal.
Musk was previously on trial in November in a separate Tesla shareholder lawsuit that targeted the salary package Tesla’s board awarded him in 2018, which CNN says has a net worth of 50,000. $9 million today. The trial, which focuses on whether the salary package was unfairly high, ended in mid-November, but the Delaware judge handling the case has yet to announce the verdict.
Tesla shareholders first sued Musk in 2018, days after Musk tweeted on August 7 about his alleged plan to privatize the company. The tweet has already resulted in an SEC lawsuit against Musk that caused him to resign as company chairman and requires Tesla lawyers to approve the CEO’s tweets about the company before they are shared , and the judge in the Tesla shareholders’ trial has already ruled that Musk “acted recklessly” with his tweet. Musk completed the deal to acquire Twitter in October after months of turmoil after first disclosing his majority stake in the company in April, including legal battles between Musk and the company after initially trying to withdraw from the agreement and have been sued by Twitter before. later reversing his decision.
Elon Musk’s Tesla tweets could cost him billions more – in court (Bloomberg)
Elon Musk faces trial over his 2018 plan to privatize Tesla (New York Times)
Twitter shareholder sues Musk, claiming he misled investors (Forbes)
Twitter shareholders sue Musk, say he ‘deflated’ stock price (Associated Press)
Musk sued by Twitter investor over ‘fraudulent’ takeover (Bloomberg)
Musk gets most Twitter shareholder lawsuits over takeover dismissed (Bloomberg)