A lawsuit was recently filed against Tesla over CEO Elon Musk‘s social media posts, which included his Twitter poll on stock sales that caused the company’s stock prices to plummet.
After Elon Musk tweeted on November 6 that he would sell 10% of his stake if Twitter users agreed, Tesla shares, which had been trading at historical highs, lost approximately a quarter of their value. Since then, Musk has sold almost $14 billion worth of shares.
Even before the poll, Musk’s statements indicated he was likely to sell major portions of stock to fulfill tax obligations for utilizing options that expire in August 2022.
Led by Tesla investor David Wagner, the lawsuit demanded access to internal records in order to determine whether Tesla and Musk violated the US securities regulator’s rules and the board members’ fiduciary responsibilities.
Tesla vs. Investor
The complaint, which was filed with the Delaware Court of Chancery on Thursday, seeks access to records and books relating to his tweets, including documentation showing whether the stock sales tweets were reviewed or pre-approved in advance.
In 2018, Musk settled a SEC lawsuit alleging that he made false and misleading statements in connection with his plan to take the firm private by agreeing to have the corporation’s legal counsel approve tweets containing important information about the firm.
The suit further stated that there is no assurance whether someone from Tesla reviews Elon Musk’s tweets. They don’t know if anyone is reviewing them. There were two people, but they left in December and April, respectively.
“Musk remains undeterred and continues to post on Twitter and social media on matters that are material to Tesla and its stockholders, and which ultimately have an impact on Tesla’s stock prices,” the shareholder added.
As clarified by Bloomberg, the Wagner v. Tesla Inc case does not name Musk as a defendant.
Tesla shares
As reported via Bloomberg, Musk has now sold 12.9 million shares for $13.6 billion, bringing his total wealth to over $20 billion. To sell 10% of his holdings, he’ll need to sell approximately 17 million shares; if that isn’t the case, he’ll need to get rid of roughly 17 million more options-weighted shares.
Tesla shares dropped 1.7 percent in the morning, just before regular trading began at 5:30 a.m. New York time Friday. The stock has fallen 25% since its high on Nov. 4th.
The 50-year-old billionaire, however, is still the world’s richest person with a net worth of $243 billion, according to the Bloomberg Billionaires Index.
How Elon Musk became rich
Elon Musk was born on June 28, 1971, in Pretoria, Transvaal, South Africa. He is a South African-born American entrepreneur and business magnate who founded the electronic payment system PayPal, became CEO of Tesla Motors and SpaceX, and created conceptual plans for a high-speed transportation system known as Hyperloop.
In 2000, he founded SpaceX, an aerospace manufacturer and space transport services company now valued at $21 billion. He is also co-founder of Tesla Motors, a company that specializes in electric premium vehicles and energy storage. Musk has stated that the goals of SolarCity, Tesla Motors, and SpaceX revolve around his vision to change the world and humanity.
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