“Market cap blown by Musk tweets and significant damage to Tesla”
An investor at Tesla, an American electric vehicle company, sued Musk and the Tesla board of directors, claiming that he was exposed to the risk of investment loss due to a tweet from CEO Elon Musk.
An unidentified Tesla investor filed a complaint with the Delaware court in the US, Reuters reported on the 12th (local time).
In the complaint, the complainant said in the complaint that Musk tweeted that Tesla’s stock price was too high on May 1 of last year, leaving shareholders exposed to billions of dollars in losses due to a “fickle” tweet.
The Tesla board of directors pointed out that in accordance with the agreement with the US Securities and Exchange Commission (SEC), Musk’s tweet should be reviewed, but that it was not implemented properly.
In a tweet from Musk in May of last year, the complainant criticized “The Tesla market capitalization of 14 billion dollars flew in a day.”
“Musk’s unrestrained tweets have a serious impact on Tesla’s financing ability,” he said. “Musk’s tweets are also driving voices inside the company to protect investors against Musk.”
Musk has been sued by the SEC in August 2018 for “Tesla delisting” tweets.
After Wall Street’s negative outlook on Tesla’s stock price at the time, Musk quickly tweeted that “we are considering converting Tesla into a private company for $420 per share.”
When Musk’s sudden tweet caused great market turmoil, the SEC sued Musk for securities fraud, claiming that Musk had deceived investors, and Musk agreed with the SEC to pay a fine of $40 million in both private and corporate names with Tesla.
At the time of agreement, Musk also agreed to have Tesla’s in-house lawyers check some of his tweets in advance.
The complainant insisted that Musk and Tesla’s directors should pay compensation for damages, saying Musk continued to tweet without prior inspection procedures despite the SEC agreement.
/yunhap news
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