Investor Sues Elon Musk, Tesla Over "Erratic" Tweets
Elon Musk continues to not only be a world leader when it comes to independent wealth and innovative automotive technologies, but he has also made a name for himself as being a man shrouded with controversy. Musk has found himself tangled in another law suit over his apparent inability to think before hitting the 'send' button on a number of emotionally-charged tweets. Failing to think of the ramifications his messaging may have on the Tesla corporation and its share holders, Musk is now facing litigation. His "erratic tweets" that are said to have violated a settlement with the U.S. Securities and Exchange Commission which Tech Crunch says "requires oversight of his social media activities."
In a world where social media prevails as being a predominant source of communication, it appears the consequences attached to these posts run deep, and in Musk's case, they've had a severely detrimental effect on shareholders.
Bloomberg first reported that Musk's behavior was exposing Tesla and all of Tesla's affiliated agencies and projects to complaints and possible litigation, and now, litigation is in place which sites the board failed to control Musk's behavior which results in substantial financial losses and increased company risk.
The man behind the launch of this legal proceeding is investor Chase Gharrity, who has recognized that Musk has not upheld his part of a previously imposed agreement. It was previously mandated for Musk to "seek pre-approval from a securities lawyer, according to the agreement filed with Manhattan federal court."
His recent barrage of tweets demonstrates a full breach of this agreement, which was previously reached between Elon Musk and the U.S. Securities and Exchange Commission. That agreement gave the powerful CEO of Tesla the freedom to use Twitter with imposed limitations. It was established that he was restricted from tweeting about certain events and financial milestones. Benzinga cited Musk's tweet in May 2020 where he mentioned "Tesla stock is too high," which resulted in more than $13 billion loss in Tesla's market value, as they discussed his pattern of erratic social media messaging.
Clearly acting on his own accord, Musk continued on his own path, and on May 1, 2021 his tweet read; "Tesla stock price is too high imo." Fans immediately responded with comments such as; "just made Tesla stock go up by saying it should go down," and "I've owned tsla for 10 years and when the pps hit 900 this week, far higher than any market analyst has ever predicted it would go, I was poised to sell. I've just upped my shares...@elonmusk may be a filthy capitalist and a bit of a dunce, but he knows how to manipulate a market."
Where this leaves Elon's social media future is anyone's guess. Hopefully, he doesn't Tweet about it.
Sources: Bloomberg, Benzinga, Tech Crunch
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