Once is not custom, Elon Musk may well have to face the consequences of his actions.
In any case, this is what has been at stake since Tuesday and the opening of a trial in which he is accused of having deliberately lied on Twitter in 2018 to manipulate Tesla’s share price. The plaintiffs accuse the billionaire of having thus cost them several billion dollars, which they therefore ask him to reimburse in damages.
What is Musk accused of?
In 2018, Elon Musk announced his wish to withdraw Tesla from the open market. To achieve this, however, the company had to buy all the shares of the other investors, which required both convincing them and gathering the necessary financing for the operation. On August 7, 2018, he announced on Twitter that he had found financing allowing him to buy back all the shares at 420 dollars per unit, while the real price was then around 330 dollars.
As a result, Tesla’s stock price climbed almost immediately to $386 as investors bet on the company’s falling valuation losing billions. As for the idea of leaving the open market, it seems to have been definitively abandoned. The SEC, the American financial policeman, had however only moderately appreciated the approach and had, among other things, imposed on Musk to have his tweets concerning Tesla reread by a lawyer before being published.
Musk’s defense? It was a joke, like everything else
Like every time things go wrong, Elon Musk takes out his joker card: one version or another of three crying laughing emojis. Here, it is through the voice of one of his lawyers that it passes: the advertised price, whimsical, was a simple reference to 420, the symbolic figure for cannabis smokers. As for the operation itself, his defense assures us: Musk was sure it was going to happen, so he would have acted hastily, but in good faith.
We imagine that among the complainants, many have had little taste for the joke. But it is now up to American justice to decide if Musk is a fraud, if he has no ethics, or if he simply does not know the law. Depending on the judgment, the businessman could have to pay several billion to the plaintiffs.
Sources: France 24, Techcrunch