Tesla Investors Claim Elon Musk’s Tweets Cost Them Billions
Tesla investors are becoming increasingly frustrated with Elon Musk, and the billions of dollars his antics are allegedly costing them may explain why they’re so upset.
The billionaire is preparing to stand trial over tweets he sent out years ago, which apparently influenced Tesla investors and is now getting him in trouble when his words didn’t hold true.
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In August 2018, Elon made a tweet claiming that he had “funding secured” to buyout Tesla in a $72 billion, a public company. From the way he wrote the tweets, it appeared that the deal was going to happen right away. However, over four years later, and the buyout Elon alluded to never happened.
Tesla’s stocks skyrocketed in the wake of Elon’s announcement, but within a week, they took a nosedive when the deal failed to go through.
A post shared by elonmusk (@elonmusk)
As a result, Elon couldn’t move forward with his plans to privatize Tesla. He also had to agree to a $40 million settlement with U.S. securities regulators and step down as Tesla’s chair.
When he takes the stand in San Francisco, the Tesla CEO is expected to offer an explanation as to why the deal never materialized.
The class-action lawsuit was originally filed by a group of investors who owned stock in Tesla for 10 days in August 2018. They claimed that Elon’s tweets cost them “billions,” and they’re now seeking unspecified damages.
Tension between Elon and Tesla investors is nothing new, but his Twitter acquisition at the end of last year didn’t help the situation.
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Critics have accused him of funnelling too much time and energy into Twitter, leaving other projects wayside. Elon himself has admitted the platform is losing millions per day, despite his cost-saving measures, like introducing a paid version of Twitter and firing half of the staff.
In November, while on the stand for an ongoing Delaware court case, Elon admitted he doesn’t want to be CEO of any company, let alone Twitter. He said he plans to find a replacement and devote less time to Twitter in the future.
The billionaire officially acquired Twitter in November for $44 billion, after trying to pull out of the deal that was announced in the spring.
He’s also sold billions of dollars of Tesla shares in a bid to afford the Twitter deal. In total, he’s offloaded $36 billion in stock, with half of the sales happening since announcing the Twitter acquisition. He’s sold shares multiple times since promising he wouldn’t let go of anymore in August.
Sources: CBC, Bloomberg,
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